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

Ben-Gurion University of the Negev, Tel Aviv University

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	American 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

All Science Journal Classification (ASJC) codes

Law
Finance

UN SDGs

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

Access to Document

10.1093/aler/ahad004

Cite this

@article{9f0f2d375cc74fde8f534d8ed3c8d6be,

title = "A Case for Pay Secrecy",

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.",

author = "Tomer Blumkin and David Lagziel and Yoram Margalioth",

note = "Publisher Copyright: {\textcopyright} The Author 2024. Published by Oxford University Press on behalf of the American Law and Economics Association.",

year = "2023",

month = jan,

day = "1",

doi = "10.1093/aler/ahad004",

language = "American English",

volume = "25",

pages = "268--299",

journal = "American Law and Economics Review",

issn = "1465-7252",

publisher = "Oxford University Press",

number = "1",

}

TY - JOUR

T1 - A Case for Pay Secrecy

AU - Blumkin, Tomer

AU - Lagziel, David

AU - Margalioth, Yoram

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

SN - 1465-7252

VL - 25

SP - 268

EP - 299

JO - American Law and Economics Review

JF - American Law and Economics Review

IS - 1

ER -

A Case for Pay Secrecy

Abstract

All Science Journal Classification (ASJC) codes

UN SDGs

Access to Document

Other files and links

Fingerprint

Cite this