Alexandre Mas: Does Transparency Lead to Pay Compression?

Date: 

Monday, September 14, 2015, 12:00pm to 1:45pm

See also: Fall 2015

Location: 

CGIS South-020, 1730 Cambridge St. (Note that this location is for the first seminar ONLY. Subsequent seminars will meet at the Harvard Kennedy School).

Alexandre Mas, Professor of Economics and Public Affairs, Princeton University.

Does pay disclosure change wage setting at the top of the public sector distribution? 

While the literature has made progress in understanding how preferences about inequality and redistribution are shaped by available information,  little is known about whether there are “real” effects of more information on pay.

This seminar will examine a 2010 California mandate that required municipal salaries to be posted online. Among top managers, new disclosure led to approximately 7 percent average compensation declines, and a 75 percent increase in their quit rate. The wage cuts were largely nominal.

Wage cuts were larger in cities with higher initial compensation, but not in cities where compensation was initially out of line with (measured) fundamentals. The response is more consistent with public aversion to high compensation than the effects of increased accountability.

View paper► 

About the speaker

Alexandre Mas is a Professor of Economics and Public Affairs at Princeton University. He is a research fellow at Institute for the Study of Labor (IZA), and a research associate at the National Bureau of Economic Research. He is also co-editor of American Economic Journals: Applied Economics, associate editor of the IZA Journal of Labor Economics, and serves on the International Advisory Committee of the British Journal of Industrial Relations

From 2010 to 2011, Professor Mas served as the Associate Director for Economic Policy and Chief Economist at the Office of Management and Budget in the Executive Office of the President, and as Chief Economist at the U.S. Department of Labor from 2009 to 2010. Previously he held appointments at the Haas School of Business and the Department of Economics of the University of California-Berkeley.

Professor Mas’ research has dealt with fairness considerations and norms in the labor market, social interactions, neighborhood segregation, the labor market effects of credit market disruptions, and unions.

He received the IZA Young Labor Economist Award and Princeton University’s Albert Rees Prize in 2009, and the Labor and Employment Relations Association’s John T. Dunlop Outstanding Scholar Award in 2008. He was named an Alfred P. Sloan Foundation Research Fellow in 2009, and was a National Bureau of Economic Research Faculty Research Fellow from 2006 to 2009.

He received a B.A. degree in Economics and Mathematics from Macalester College in 1999, and a Ph.D. in Economics from Princeton University in 2004.