Salary Transparency and Gender Pay Inequality : Evidence from Canadian Universities

We examine whether salary transparency influences gender pay inequality in the context of Canadian universities by exploiting a policy change enacted in one Canadian province that required salary disclosure through a publicly searchable database, thus lowering the cost of monitoring the gender pay gap. We find that, on average, salary disclosure improves gender pay equality but institutions respond in different ways. Despite little media attention around gender equality at the time of the policy, institutions most likely to anticipate higher scrutiny, such as top ranked institutions, respond more aggressively to improve gender pay equality---both in terms of the magnitude and type of response. Combined, our findings suggest that the extent of change from salary transparency depends on the reduction in monitoring costs and organizational characteristics