For ten years now the „Equal Pay Act“ has been in force in Denmark. Wages must be published. The law requires companies with more than 35 employees and at least ten employees of each gender in a specific occupation to publish the wages they pay linked to the gender of the receiving employee.
Equal Work, Equal Pay
As the news magazine Bloomberg reports, this relatively new law gave scientists from several business schools (among overs Columbia University, NSEAD and the University of Copenhagen) a chance to study the effect of transparency. What happened to salaries before and after the look took effect? What happened to salaries at companies that didn’t have to publish their pays?
Firms that had to report their pay data, increased the salaries of women significantly. Men at those firms got raises too, but they were smaller. “For the first time we are able to document, that pay-transparency really works. A 7 percent reduction in the pay-gap may not sound impressive, but given the fact that only a limited number of firms in Denmark are governed by this legislation the effect is significant. We can even prove the effect amongst firms, that were not required to provide gender segregated pay-statistics.” states Morten Bennedsen,Professor of Economics at INSEAD and the University of Copenhagen.
Others follow
Other countries follow the Danish example. In Germany the “Entgelttransparenzgesetz” became law early 2018. Companies with more than 200 employees must reveal all salaries in a specific occupation if asked for. Iceland forthrightly forbids companies to pay differently for the same job.