A Case for Pay Secrecy

Tomer Blumkin; David Lagziel; Yoram Margalioth

doi:10.1093/aler/ahad004

A Case for Pay Secrecy

Tomer Blumkin
, David Lagziel
, Yoram Margalioth

Department of Economics

Research output: Contribution to journal › Article › peer-review

Abstract

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.

Original language	English
Pages (from-to)	268-299
Number of pages	32
Journal	American Law and Economics Review
Volume	25
Issue number	1
DOIs	https://doi.org/10.1093/aler/ahad004
State	Published - 1 Jan 2023

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth

ASJC Scopus subject areas

Finance
Law

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10.1093/aler/ahad004

Cite this

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A Case for Pay Secrecy

Abstract

UN SDGs

ASJC Scopus subject areas

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