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584. How to Pave the Road to Hell

Freakonomics Radio

Exploring the Impact of Pay Transparency Policies

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This chapter delves into the three types of pay transparency - peer, cross-firm, and vertical transparency, and how they influence individuals' understanding of salary comparisons within and across companies. It discusses the reluctance of individuals, especially wealthier and older workers, to share income information due to fear of resentment and workplace competition. The chapter also examines the consequences of pay transparency laws on wages, negotiations, and gender pay gaps, highlighting both positive and negative impacts.

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