Wage secrecy as a social convention

Leif Danziger; Eliakim Katz

doi:10.1111/j.1465-7295.1997.tb01894.x

Wage secrecy as a social convention

Leif Danziger, Eliakim Katz

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

24 Scopus citations

Abstract

Despite the general belief that a free flow of information enhances efficiency, social convention appears to call for secrecy regarding individuals' wages. This paper provides an explanation for this convention. We suggest that the role of wage secrecy is to reduce effective labor mobility, and thereby enhance the feasibility of risk-shifting contracts. Wage secrecy may yield a mix of mobility and risk shifting that is superior both to a spot market for labor and to a social convention that binds workers to their employers.

Original language	English
Pages (from-to)	59-69
Number of pages	11
Journal	Economic Inquiry
Volume	35
Issue number	1
DOIs	https://doi.org/10.1111/j.1465-7295.1997.tb01894.x
State	Published - 1 Jan 1997
Externally published	Yes

ASJC Scopus subject areas

General Business, Management and Accounting
Economics and Econometrics

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10.1111/j.1465-7295.1997.tb01894.x

Cite this

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Wage secrecy as a social convention

Abstract

ASJC Scopus subject areas

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