We investigate the economic consequences of mandating salary range disclosures in job postings in Colorado, Washington, and California. We find a sizable increase in salary range disclosures and a meaningful reduction in gender pay gaps in response to the transparency mandates. We also document that firm profitability declines and that markets respond negatively to the announcement of these mandates suggesting that the mandates impose net costs onto regulated firms.
In additional tests, we find that these negative outcomes are likely driven by compliance costs such as pay pressure (higher offered salaries and overall wage bills). Contrary to voiced concerns, we find no increase in recruitment inefficiencies or biased pay perceptions. Our findings offer preliminary, but nuanced insights into the multifaceted impacts of pay range disclosure laws, highlighting both their societal benefits and financial consequences for firms.
Edith Leung is a Professor of Accounting at Tilburg University.
She was a CentER PhD student between 2009 and 2013, visiting the University of Chicago in her final year. After obtaining her PhD, she joined the Erasmus School of Economics as a faculty member, where she held various roles, including Head of the Section of Accounting, Auditing, and Control between 2022 and 2024.
She rejoined her alma mater in October 2024 and is currently the Graduate Program Coordinator in Accounting for CentER.
Her research focuses on (financial) regulation and disclosure. Her recent work examines the broader implications of disclosure and transparency, as well as how non-financial stakeholders, such as supply chain partners, influence corporate reporting.
She received a Veni grant in 2016 to conduct research on non-GAAP reporting and currently serves on the Standing Scientific Committee of the European Accounting Association as Track Chair for Financial Analysis.
The seminar will be held in English.
Major information: Eleonora Monaco (e.monaco@unibo.it).