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Effects of Pay Transparency Legislation on Female Employment and Capital Investment Reallocation: A Difference-in-Discontnuities Design

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Abstract

This paper studies Chile’s 2009 Equal Pay for Equal Work law and its impact on manufacturing plant behavior. Using a difference-in-discontinuities design to exploit the law’s quasi-experimental properties, I find that large plants that
face disclosure requirements and higher penalties boost automation by increasing investment in new machinery to a greater extent than plants in the control group. While total female employment increases, gains in the female share of the workforce are concentrated among executives and white-collar positions, with little change among blue-collar workers, which highlights unintended distributional consequences in female representation across occupations. Regarding plant performance, the average compensation package increases, but plant productivity and profitability measures show no significant differences from those for the control group.

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