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584. How to Pave the Road to Hell

Freakonomics Radio

The Impact of Pay Transparency Laws on Wage Convergence

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Data from various sources was used by Colin to study the impact of pay transparency laws. In states with such laws, wages became linked, leading to convergence when it came to negotiations and pay. These laws prevent bias in rewarding employees and increase a firm's incentive to bargain aggressively to save costs, resulting in compressed pay across employees.

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