We show that providing publicly available wage information in vacancies, so-called external
pay transparency, can reduce the gender gap in entry wages. There is an increasing
interest in pay transparency policies as a tool to combat unequal pay. We exploit a reform
of Austria?s Equal Treatment Law to evaluate how providing wage information in
vacancies affects the gender wage gap. To take into account that the value of providing
such external pay information is likely to be heterogeneous along the wage distribution,
we implement a Quantile Difference-in-Difference model. The reform led to a small overall
reduction of the gender wage gap. Our main results highlight that reductions in the wage
gap are larger in circumstances where women are likely to hold misspecified beliefs about
their labor market options and when they have to make job acceptance decisions under
pressure. The reduction in the gender wage gap was caused by an increase in women?s
earnings, particularly at the lower part of the distribution. Earnings of men, on the other
side, remained largely constant. Our results lend support to policy proposals aimed at
increasing external pay transparency.
Forschungs-