Zoë B. Cullen
60 N. Harvard, Rock Center 210
Harvard Business School
Boston, MA 02163
Institutional Affiliation: Harvard University
NBER Working Papers and Publications
|October 2018||The Salary Taboo: Privacy Norms and the Diffusion of Information|
with Ricardo Perez-Truglia: w25145
The diffusion of salary information has important implications for labor markets, such as wage discrimination policies and collective bargaining. Despite the widespread view that transmission of salary information is imperfect and unequal, there is little direct evidence on the magnitude and sources of these frictions. We conduct a field experiment with 755 employees at a multibillion-dollar corporation to study how people search for and share salary information. We show that most employees have inaccurate beliefs about the average salary of their peers. We provide evidence that such misperceptions arise, in part, due to search costs, and we provide suggestive evidence that these costs are associated with privacy norms. Last, we show that, contrary to widespread belief, there are no signif...
|July 2018||How Much Does Your Boss Make? The Effects of Salary Comparisons|
with Ricardo Perez-Truglia: w24841
We study how employees learn about the salaries of their peers and managers and how their beliefs about those salaries affect their own behavior. We conducted a field experiment with a sample of 2,060 employees from a multi-billion dollar corporation. We combine rich data from surveys and administrative records with data from the experiment, which provided some employees with accurate information about the salaries of others. First, we document large misperceptions about salaries and identify some of their sources. Second, we find that perceived peer and manager salaries have a significant causal effect on employee behavior. These effects are different for horizontal and vertical comparisons. While higher perceived peer salary decreases effort, output, and retention, higher perceived mana...