Closing the Gender Pay Gap within Firms: Evidence from a Field Experiment on Promoting Pay Equity
We present a natural field experiment on promoting pay equity through simple and gender-blind modifications of the salary planning process in a large multinational company. The experiment takes place among 622 middle managers overseeing 8572 employees in 7 different countries. The treatments provide for different variants of a decision guidance for middle managers and a budget reallocation between teams aimed at promoting pay equity in the salary planning process. We document a pronounced gender gap in both salaries and salary increases in particular for male supervisors. The treatments serve to close this gap. We find no evidence that the decision guidance undermines performance differentiation.