Before the First Paycheck: What Salary Ranges Can and Cannot Do
Salary transparency before employment changes the moment at which a worker can make a pay decision. This chapter examines salary information in job advertisements and earlier recruitment stages, then connects it to the emerging EU framework, so the reader can judge a disclosure rule by its timing, realism, negotiability and enforcement—not by the mere presence of a number.
A salary range and a firm-level gender-pay-gap report address different information problems. The range concerns the job a person is considering; the firm-level report describes the employer’s existing pay distribution. One can improve entry bargaining while the other creates reputational or internal pressure. Neither substitutes for a method that evaluates work or checks what happens after hiring.
The range changes bargaining and search conditions
Before a salary is disclosed, an employer usually knows more about the budget for a role and the market value of the job than an applicant does. That asymmetry can affect whether the applicant applies, what pay they expect, and how confidently they negotiate. A credible salary range gives the applicant an external reference before they invest substantial time in an application. It can also make it harder for an employer to base an offer on a candidate’s previous pay rather than on the work to be performed.
The OECD identifies several possible mechanisms. First, clear information can make negotiation more likely. Research tracking around 2,500 jobseekers in a natural field experiment found that stating the salary and whether it was negotiable increased women’s likelihood of negotiating. When pay is opaque, women may anchor their expectations at the lower end of a possible range, and social expectations can make assertive negotiation more costly for women than for men. A disclosure rule can reduce uncertainty, but it cannot by itself remove the social penalty attached to asking for more.
Second, visible pay can affect sorting. A jobseeker who sees the expected compensation can compare employers and decide whether to apply for a higher-paying role. Someone who would otherwise undersell their market value may redirect their search. This is a different mechanism from bargaining within a job already chosen. Better information might raise the wage negotiated for the same job without changing who applies to better-paid occupations. Or it might broaden applications while leaving within-job pay unchanged.
Third, salary information can improve recruitment efficiency for employers. Candidates can decide earlier whether a role is financially viable, and an employer may attract applicants whose expectations fit the available budget. The effect on gender equality depends on what the disclosure reveals and what other features of the job are visible. A range may help women negotiate but do little to change occupational segregation if women and men continue to sort into different fields. Information about flexible or part-time work can also affect the applicant pool, but salary disclosure alone does not address the care constraints that shape career choices.
The evidence from Austria shows why disclosure quality matters. Austria introduced a requirement for salary information in job advertisements, and by 2014 formal compliance was reported at 87%. Yet many employers listed only the collective-agreement minimum together with a phrase indicating willingness to pay more. Applicants often could not tell what salary the employer actually expected to offer. The rule was formally satisfied while the information remained weak for negotiation.
The same evaluation identified a possible anchoring problem. Women were more likely than men to use the posted salary as their negotiation anchor—43% compared with 24%. If the posted figure is a legal minimum rather than a realistic range, the disclosure can guide expectations downward instead of giving applicants a stronger basis for bargaining.