https://macropaperwarehouse.com/authors/ricardo-perez-truglia/Ricardo Perez-TrugliaHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/whats-my-employee-worth-the-effects-of-salary-benchmarking/https://macropaperwarehouse.com/papers/whats-my-employee-worth-the-effects-of-salary-benchmarking/<p>This paper studies how salary benchmarking tools — products that reveal aggregate market pay statistics for specific job titles — affect employee compensation. The research question is whether firms&rsquo; access to such tools causally changes how they set salaries, and what this implies about information frictions in labor markets and the policy debate over benchmarking regulation.</p> <p>The authors collaborated with the largest U.S. payroll processing company (serving 650,000 firms and 20 million workers), exploiting the staggered roll-out of a proprietary Compensation Benchmark Tool. The tool aggregates payroll data into salary benchmarks by standardized job title, with the median base salary as its most prominent statistic. The study draws on three linked administrative datasets: payroll records (January 2017 to July 2021), tool usage logs (September 2019 to August 2021), and historical benchmark snapshots. The main analytical sample covers new hires at 586 treatment firms that gained tool access and 1,419 matched control firms that did not, within a 10-quarter window around each firm&rsquo;s onboarding date.</p>