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^*

^*Corresponding author for this work

Faculty of Law

Ben-Gurion University of the Negev

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	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 - 2023

Funding

Funders	Funder number
Coller Business School at Tel-Aviv University
Ben-Gurion University of the Negev
Hebrew University of Jerusalem
Tel Aviv University
Israel Science Foundation	513/19

UN SDGs

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

SDG 8 Decent Work and Economic Growth

Access to Document

10.1093/aler/ahad004

Cite this

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A Case for Pay Secrecy

Abstract

Funding

UN SDGs

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