Salary Transparency Laws and Wage Outcomes: Evidence from Staggered State Adoption

Abstract

Between 2021 and 2025, thirteen U.S. states adopted laws requiring employers to disclose salary ranges in job postings. Using a difference-in-differences design with staggered adoption, we estimate the causal effect of these salary transparency laws on wage outcomes. Drawing on CPS Merged Outgoing Rotation Group data covering over 1.1 million workers from 2016–2024, we find that transparency laws are associated with a statistically significant 4.2 log point decrease in weekly earnings (SE = 0.007, $p < 0.001$). We find suggestive evidence that the gender wage gap narrows in treated states, with a 1.2 percentage point reduction, though this effect is not statistically significant. The negative wage effects are larger for male workers ($-4.3%$) than female workers ($-3.1%$), consistent with wage compression reducing previously higher male wages. Heterogeneity analysis reveals that effects are concentrated among middle-aged workers (ages 35-49: $-5.6%$) and college-educated workers ($-4.7%$), while effects at the 10th and 90th percentiles ($-5.2%$ each) are larger than at the median ($-3.0%$), suggesting compression from both tails. These findings contribute to a growing literature on pay transparency, highlighting the potential unintended consequences of well-intentioned labor market policies. However, significant pre-trend violations in the event study raise concerns about the parallel trends assumption, and we urge caution in interpreting these estimates as causal. \vspace{1em} JEL Codes: J31, J38, J71, K31 \vspace{0.5em} Keywords: Salary transparency, pay equity, wage determination, gender wage gap, difference-in-differences