The influence of pay transparency on (gender) inequity, inequality and the performance basis of pay.

Recent decades have witnessed a growing focus on two distinct income patterns: persistent pay inequity, particularly a gender pay gap, and growing pay inequality. Pay transparency is widely advanced as a remedy for both. Yet we know little about the systemic influence of this policy on the evolution of pay practices within organizations. To address this void, we assemble a dataset combining detailed performance, demographic and salary data for approximately 100,000 US academics between 1997 and 2017. We then exploit staggered shocks to wage transparency to explore how this change reshapes pay practices. We find evidence that pay transparency causes significant increases in both the equity and equality of pay, and significant and sizeable reductions in the link between pay and individually measured performance.

Initial prejudices create cross-generational intergroup mistrust.

The present investigation modeled the emergence and persistence of intergroup bias and discrimination in artificial societies. Initial unfair prejudices held by members of a dominant group elicit confirmatory behavior (diminished cooperation) from members of a subordinate group via a self-fulfilling prophecy. Further, when individual learning is tempered by conformity to peers, inaccurate beliefs about the stigmatized subordinate group persist long-term. Even completely replacing dominant group members with enlightened individuals through generational change is inadequate to break the cycle of intergroup distrust and non-collaboration. The longer the enlightenment of a society is delayed, the more intergroup trust is irretrievably lost.