Show Me the Money! The Role of Salary Disclosure in the AI Labor Market


This study exploits recent Pay Transparency (PT) laws in the US to examine how employers’ salary disclosure decisions impact hiring efficiency in AI talent acquisition. Using a novel dataset with detailed salary and time-to-fill information for AI job postings, we find that larger firms and those facing greater peer pressure are more likely to disclose salary information in their job postings. We further find that prior to PT regulation, voluntary salary disclosure significantly extends AI job vacancy durations, suggesting that reduced information asymmetry may attract more applicants and empower employees with greater bargaining power, leading to prolonged negotiations and screening processes. The effect is more pronounced for smaller firms and for positions that require an advanced degree. Interestingly, after salary disclosure became mandatory, vacancy durations significantly decreased. This shift indicates when salary disclosure is widely adopted, the initial signaling effect of those who voluntarily disclosed early is neutralized, resulting in a more level playing field where job seekers and employers have aligned expectations. Our findings suggest that while voluntary salary disclosure may initially lengthen the hiring process due in part to more applicants and extensive negotiations, mandatory pay transparency fosters quicker matches, thereby enhancing hiring efficiency in the AI labor market.