Posted wages, Pay Transparency, and Firm Heterogeneity

Welcome to the UiS School of Business and Law seminar, Economics and Finance. The seminar is open for all interested.

Title: Posted wages, Pay Transparency, and Firm Heterogeneity

• Date: Wednesday November 27
• Time: 12:15-13:15.
• Place: University of Stavanger School of Business and Law, Ullandhaug Campus, Elise Ottesen-Jensens hus, room EOJ 276/277 and on Teams
• Seminar guest: Samuel Škoda, University of Oslo
  
  Link to Teams meeting
  Meeting-ID: 319 136 037 253
  Password: dP9nv7J8

• Title: Posted wages, Pay Transparency, and Firm Heterogeneity

Abstract:

We study the impact of pay transparency reform introduced in 2018 in Slovakia on employment, wages and worker-firm matching. By linking online job board data to administrative social security data, we show that before the reform less than 25% provided wage information in their advertisements.

We document also that providing wage information in advertisements is beneficial in terms of leading more views and applications. Following the reform that forced all firms to post wage information, we find an increase in applications at firms that did not post before. Still, the increase in applications does not seem to benefit firms: we find that newly hired workers (but not incumbents) have 5-10% higher wages following the reform. This increase in wages mainly takes place, at low-quality firms, which did not post before. There is no change in hiring probability and in workers' quality indicating that worker-firm match did not improve. These findings highlight that forcing firms to advertise wages helped workers to negotiate higher wages.