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Title: Pay Secrecy Laws, Salary Discrimination, and Innovation Productivity

Citation Type: Miscellaneous

Publication Year: 2018

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Abstract: We propose that pay inequality hurts corporate innovation and inventor productivity, and we identify such effects using the staggered passage of U.S. state-level pay secrecy laws that enhance pay equality. Specifically, we find significant increases in the quantity, quality, and value of patents produced by firms headquartered in states that have adopted such laws. Moreover, these increases are more pronounced for firms in states with greater pay gaps with respect to gender and ethnicity. Further channel tests suggest that the passage of pay secrecy laws promotes innovation by reducing pay gaps in ways that motivate minority inventors and also encourage workplace collaboration. Abstract We propose that pay inequality hurts corporate innovation and inventor productivity, and we identify such effects using the staggered passage of U.S. state-level pay secrecy laws that enhance pay equality. Specifically, we find significant increases in the quantity, quality, and value of patents produced by firms headquartered in states that have adopted such laws. Moreover, these increases are more pronounced for firms in states with greater pay gaps with respect to gender and ethnicity. Further channel tests suggest that the passage of pay secrecy laws promotes innovation by reducing pay gaps in ways that motivate minority inventors and also encourage workplace collaboration.

Url: http://sfm.finance.nsysu.edu.tw/php/Papers/CompletePaper/039-727584833.pdf

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Authors: Gao, Huasheng; Hsu, Po-Hsuan; Zhang, Jin

Publisher: Fudan University

Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure, Race and Ethnicity

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