Sharkey, A., Pontikes, E., & Hsu, G. (2022). The Impact of Mandated Pay Gap Transparency on Firms’ Reputations as Employers. Administrative Science Quarterly, 67(4), 1136-1179.

Mandated gender wage gap disclosure laws are an increasingly popular butrelatively untested solution to gender-based compensation inequalities.Scholars and policymakers alike have argued that disclosure will lead togreater social accountability—either reputational harm for firms revealinglarge disparities or benefit for more-egalitarian organizations. Yet littleresearch has directly tested this central assumption. We advanceunderstanding of this issue by examining reactions from a key constituencyaffected by pay gaps: employees. We analyze the existence, magnitude, andpersistence of changes in employees’ public affective evaluations of theiremployers on the review site Glassdoor in the wake of pay gap disclosuresprompted by new regulations in the United Kingdom. We find a short-livedimprovement in employees’ evaluations of organizations reporting pay parity,consistent with a reputational boost. At the same time, we find littleevidence of a negative post-disclosure reaction from employees of firmsreporting sizable gender-based disparities. We take an abductive approach toinvestigate these surprising findings, probing key assumptions and theviability of different plausible explanations for the results. We considerhow our empirical findings can inform the development of novel theory in theareas of gender wage inequality, reputation, and transparency.