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Publications
Publications
  • June 2023
  • Article
  • Journal of Public Economics

The Salary Taboo: Privacy Norms and the Diffusion of Information

By: Zoë Cullen and Ricardo Perez-Truglia
  • Format:Electronic
  • | Pages:17
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Abstract

The limited diffusion of salary information has implications for labor markets, such as wage discrimination policies and collective bargaining. Access to salary information is believed to be limited and unequal, but there is little direct evidence on the sources of these information frictions. Social scientists have long conjectured that privacy norms around salary (i.e., the “salary taboo”) play an important role. We provide unique evidence of this phenomenon based on a field experiment with 755 employees at a multibillion-dollar corporation. We provide revealed-preference evidence that many employees are unwilling to reveal their salaries to coworkers and reluctant to ask coworkers about their salaries. These frictions are still present, but smaller in magnitude, when sharing information that is less sensitive (seniority information). We discuss implications for pay transparency policies and the gender wage gap.

Keywords

Search Costs; Privacy; Norms; Compensation; Financial Industry; Field Experiment; Knowledge Dissemination; Equality and Inequality; Gender; Compensation and Benefits; Societal Protocols

Citation

Cullen, Zoë, and Ricardo Perez-Truglia. "The Salary Taboo: Privacy Norms and the Diffusion of Information." Art. 104890. Journal of Public Economics 222 (June 2023).
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About The Author

Zoe B. Cullen

Entrepreneurial Management
→More Publications

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More from the Authors
  • Pushing the Envelope: The Effects of Salary Negotiations By: Zoë B. Cullen, Bobak Pakzad-Hurson and Richardo Perez-Truglia
  • Navigating Choppy Waters: How U.S. Trade Policy Uncertainty Affects Small Businesses By: David Atkin, Zoë Cullen and Ebehi Iyoha
  • Metaphysic AI: Rethinking the Value of Human Expertise By: Zoë B. Cullen, Shikhar Ghosh and Shweta Bagai
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