Topic:

Pay Disclosure Laws and Employee Salary: Evidence from U.S. Banks

Time&Date: 

10:30 am - 12:00 pm, November 15, 2024 (Friday)

Venue

Room 103, Conference Complex Ⅱ

Speaker:

Prof. Daniel Yang (The Hong Kong University of Science and Technology)

In the United States, state-level pay disclosure laws stipulate that employers provide salary information to job applicants and current employees. While the laws aim to promote transparency and empower employees with more direct information about salary, they may enable an indirect exchange of salary information among employers in local labor markets. Using salary information in job postings by banks, we find that the laws lead to lower posted salaries. Consistent with tacit collusion among employers, the effect is stronger for banks with greater labor market power and when salary-disclosed job postings become more salient in local markets. We further document that salary ranges in individual job postings become narrower and variations in posted salaries within the same local market-occupation categories decrease. Finally, we show that bank-level average salaries decrease while profit margins increase following the laws. Our evidence highlights employers' strategic use of public salary disclosure in labor markets, with policy implications for the costs of salary disclosure regulations.

Biography:

Prof. Daniel Yang joined the Hong Kong University of Science and Technology as an Assistant Professor of Accounting in 2022, after earning his Ph.D. from the Ohio State University. His research focuses on debt contracting and labor market. Prof. Yang’s work has been published in leading accounting journals, including Journal of Accounting and Economics, The Accounting Review, and Contemporary Accounting Research.