Gender Pay Disclosure and Firm Performance: Quasi-Experimental Evidence from the United Kingdom

This paper investigates the impact of pay transparency on firm performance, measured as sales growth, in a large sample of UK-registered companies between 2005 and 2023. We employ a difference-in-difference approach based on the pay transparency regulation enacted in 2017, which mandated all companies registered in the United Kingdom with at least 250 employees to publicly disclose gender pay equality indicators. We show that the pay transparency regulation improved firm performance by 0.016 percentage points in terms of sales growth in companies affected by the law compared to those with under 250 employees. Furthermore, firms subject to the reporting requirement and led by women experienced faster sales growth (by about 0.01 percentage points) than those led by men, after the introduction of the law. Similarly, the positive effect of the pay transparency regulation on firm performance is more pronounced in industries with the largest share of female workers.