In academic environments: Evidence that pay transparency causes significant increases in both the equity and equality of pay, & significant and sizeable reductions in the link between pay & individually measured performance

The influence of pay transparency on (gender) inequity, inequality and the performance basis of pay. Tomasz Obloj & Todd Zenger. Nature Human Behaviour, Feb 10 2022. https://www.nature.com/articles/s41562-022-01288-9

Abstract: Recent decades have witnessed a growing focus on two distinct income patterns: persistent pay inequity, particularly a gender pay gap, and growing pay inequality. Pay transparency is widely advanced as a remedy for both. Yet we know little about the systemic influence of this policy on the evolution of pay practices within organizations. To address this void, we assemble a dataset combining detailed performance, demographic and salary data for approximately 100,000 US academics between 1997 and 2017. We then exploit staggered shocks to wage transparency to explore how this change reshapes pay practices. We find evidence that pay transparency causes significant increases in both the equity and equality of pay, and significant and sizeable reductions in the link between pay and individually measured performance.

Check also Equilibrium Effects of Pay Transparency. Zoe B. Cullen & Bobak Pakzad-Hurson. NBER Working Paper 28903, Jun 2021. Pay transparency leads to lower average wages when pay is not fixed in pay classes: Employers credibly refuse to pay high wages to any one worker to avoid costly renegotiations with others under transparency