Pay Transparency and the Gender Wage Gap in Germany: A Quasi-Experimental Assessment

This paper examines the impact of Germany’s 2017 Pay Transparency Law, Entgelttransparenzgesetz, on gender wage inequality. Using a quasi-experimental design and two complementary approaches, Difference-in-Differences (DID) and Synthetic Difference-in-Differences (SDID), the paper assesses whether the reform produced measurable changes in the gender wage gap relative to comparable Organization for Economic Co-operation and Development (OECD) countries. The analysis finds a modest but statistically robust narrowing of the unadjusted wage gap, suggesting that transparency can influence wage-setting behavior by reducing informational asymmetries and strengthening workers’ bargaining power. While the effect is limited in scale, Germany’s experience shows that transparency policies can make wage disparities more contestable and contribute to incremental progress in pay equity. At the same time, the findings underline that transparency alone is insufficient to close structural inequalities, highlighting the need for complementary measures such as enforcement mechanisms and equity audits. Taken together, the study offers evidence that transparency is neither symbolic nor transformative in isolation, but when properly designed, it can serve as an effective lever for advancing gender wage equality.