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June 4, 2025

Tackling gender inequality in the labor market

How a UK transparency policy impacted the gender wage gap.

Tyler Smith

Source: Dmitry Demidovich

Many advanced countries have made recent pushes to close what remains of the , including policies requiring that companies let workers know how much they are making relative to their peers. The impact of these policies—and why they do or don’t work—is an active area of research for economists.

In a paper in the 蝌蚪网 Journal: Economic Policy, authors , , , and show that a pay transparency mandate in the United Kingdom successfully reduced the gender pay gap, but not by boosting women’s salaries.

Since 2018, UK companies with at least 250 employees have been required to publicly report gender equality indicators, including median and mean pay gaps, on both their websites and a government portal. By comparing companies just above and below this 250-employee threshold, the researchers were able to estimate the effects of the policy on company payment practices.

Figure 2 from the authors’ paper shows what happened to hourly wages for men and women before and after the UK's transparency requirements went into effect, indicated by the dashed vertical line. The vertical bars indicate 90 and 95 percent confidence intervals.

from Blundell et al. (2025)

Panel A shows the gap between men's and women's pay narrowing after 2018 because of the transparency requirement. However, Panel C shows that the mandate was not responsible for any increase in women's wages. In fact, Panel B reveals that shortly after the law went into effect, men's wages in affected companies began declining relative to similar companies not subject to the transparency requirements.

Overall, the transparency policy reduced the gender pay gap by roughly 20 percent, but the reduction came entirely from a 3 percent slowdown in men's pay growth.

The authors argue that more transparency resulted in less bargaining power for better-paid men, which resulted in reduced growth in bonus payments and fewer promotions. 

While the UK’s disclosure policy achieved the goal of reducing the wage gap, the findings suggest the need for complementary policies that actively improve women's outcomes in the labor market.