In recent years, several countries and regions around the world have approved new regulations requiring companies to disclose salary information broken down by gender and other demographic data, revealing huge still-on-going payment gaps.

Four renowned professors and researchers have come up with some experiments that provide causal evidence that when firms are revealed to have gender pay gaps, consumers are less willing to pay for their goods – a reaction driven by consumer perceptions of unfairness. 

According to the researchers, one recent estimate suggests that globally comparing differences in average annual pay, women earn 57% of what men make. This gender pay gap exists at the highest levels of business as well: Female executives at S&P 1500 firms earn on average 45% less than their male counterparts.

Although negative reactions to learning about the pay gap were common to both genders, women were even more likely than men to leave a company after their pay gap was revealed, expressing negative sentiments online in response. Female participants’ interest in buying a company’s products fell twice as much as that of male participants.

The authors believe these results may have societal implications for a greater good: “gender pay gap disclosure could lead to actual changes in consumer responses, thereby putting pressure on firms to reduce gender inequality”.

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Source: (2021) Journal of Consumer Psychology. “Consumers – Especially Women – Avoid Buying From Firms With Higher Gender Pay Gaps”.