Impact of Pay Transparency Legislation on Gender Wage Gap: Evidence from Colorado

Sam Kuhn
kuhnsb@bc.edu

Boston College

Introduction

“Equal Pay for Equal Work Act”

Historical Pay Gap

Historical Wage Ratio

Lit Review

Kim (2015)

Baker (2023)

Baker (2023)

Gamage (2020)

Cullen (2023)

Data

IPUMS CPS Basic

Empirical Model

To estimate the impact Colorado’s law had on the gender wage gap, two separate regression models were estimated:

For women only:

\[ Wage_{st} = \beta_0 + \beta_1Treated_s + \beta_2Post_t + \beta_3(Treated_s*Post_t) + \beta_4X_{st} + \epsilon_{st} \]

For men only:

\[ Wage_{st} = \beta_0 + \beta_1Treated_s + \beta_2Post_t + \beta_3(Treated_s*Post_t) + \beta_4X_{st} + \epsilon_{st} \]

Main Results

Discussion

  • Statistical Analysis:

    • Interaction term (Colorado*Post 2021) indicates:

      • 5.9% wage increase for women.

      • 4.1% wage increase for men.

    • Results are statistically significant at the 0.1% level.

  • Robustness and Credibility:

    • Clustering standard errors at the state level enhances the reliability of findings.

Future Work

New state legislation

Staggered Diff-in-Diff

Conclusion

  • Key Findings:

    • The “Equal Pay for Equal Work Act” significantly reduced the gender wage gap in Colorado.

    • Post-2021 implementation, women’s wages increased by 1.8 percentage points more than men’s.

  • Impact of Pay Transparency:

    • Demonstrates the role of pay transparency in leveling the wage negotiation playing field.

    • Supports broader wage equity by providing more information during job negotiations.