Workers often remain in their jobs even when they know they may get higher wages elsewhere, raising questions about the effectiveness of pay transparency laws. This column draws on a large German survey to examine how information frictions shape labour market outcomes. The findings suggest that workers are better informed than many policymakers assume, but prefer to stay unless an outside offer is markedly higher, citing personal ties, reluctance to change, and location as key reasons. Women are less likely than men to ask for salaries at the upper end even when presented with identical pay ranges. Information transparency alone may not lift wages or close gender gaps – measures that make firm transitions easier may be needed.

Women earn 5 percent less than men, on average, at employers that bargain individually

Women earn 5 percent less than men, on average, at employers that bargain individually