TY - JOUR
T1 - A Case for Pay Secrecy
AU - Blumkin, Tomer
AU - Lagziel, David
AU - Margalioth, Yoram
N1 - Publisher Copyright:
© The Author 2024. Published by Oxford University Press on behalf of the American Law and Economics Association.
PY - 2023/1/1
Y1 - 2023/1/1
N2 - In this paper, we study a labor market setup in which workers exhibit relative remuneration concerns with respect to their peers. We first characterize the optimal labor contract offered by the firm and provide necessary and sufficient conditions for the desirability of incorporating pay-secrecy clauses in such a contract. We then demonstrate that, in contrast to conventional wisdom viewing wage-secrecy arrangements as detrimental for workers, the latter may, in fact, gain from the lackof pay transparency.
AB - In this paper, we study a labor market setup in which workers exhibit relative remuneration concerns with respect to their peers. We first characterize the optimal labor contract offered by the firm and provide necessary and sufficient conditions for the desirability of incorporating pay-secrecy clauses in such a contract. We then demonstrate that, in contrast to conventional wisdom viewing wage-secrecy arrangements as detrimental for workers, the latter may, in fact, gain from the lackof pay transparency.
UR - http://www.scopus.com/inward/record.url?scp=85190301096&partnerID=8YFLogxK
U2 - 10.1093/aler/ahad004
DO - 10.1093/aler/ahad004
M3 - Article
AN - SCOPUS:85190301096
SN - 1465-7252
VL - 25
SP - 268
EP - 299
JO - American Law and Economics Review
JF - American Law and Economics Review
IS - 1
ER -
