Claire Lim discussion of: Pay transparency

Abstract

This is an exciting and thought-provoking paper. The authors conducted a set of carefully and cleverly designed experiments aimed at addressing prominent policy issues. While the authors address important issues, there are also the following remaining questions that the literature will need to address in future research. First, the authors designed the experiment in a way that makes the measurement of productivity easy and transparent. In the real world, there is a great deal of variation in the difficulties of productivity measurement across industries. While it is relatively easy to measure the productivity of low-skilled workers in the manufacturing industries, it is extremely difficult to measure productivity in knowledge-oriented industries where an important part of the performance is about creativity. Also, the importance of teamwork, which hinders the measurement of each individual’s productivity, varies greatly across industries. This issue raises questions on the scope of applicability of the present study. An important obstacle to gender equality in pay is the difficulties in the measurement of productivity. For a woman to pursue a legal case on gender discrimination in pay, she needs to prove that she is paid less than a man carrying out tasks of equal value. In reality, finding a colleague with an equal value of work and proving that the pay differential is driven solely or primarily by gender is possible but is a very difficult task due to the difficulties in measuring the productivity or the value of their work. This issue also begs the question of what types of industries the lessons from the present study apply to. It is reasonable to postulate that industries with more severe difficulties in measuring productivity may have a larger gender pay gap.