Over the past decade, pay transparency policies have emerged as a key strategy to address gender pay disparities, requiring firms to disclose pay gaps or allowing open discussion of salaries. While these policies aim to empower employees with information to negotiate fairer pay, their effectiveness has been mixed, with studies showing modest reductions in pay gaps at best. This paper explores an underexamined mechanism that may limit the impact of these policies: firms’ strategic manipulation of organizational structures. Drawing on social psychology and organizational theory, we argue that firms may respond to transparency mandates by proliferating job titles, particularly for non-managerial roles, to obscure pay benchmarks and hinder salary negotiations. Using a difference-in-differences approach, we analyze data from 1,364 UK firms over the period 2013–2020, focusing on the 2017 UK Gender Pay Gap reporting law. We find that firms subject to the reporting requirement increased unique job titles for non-managerial positions by an average of 2% annually following the policy introduction. This suggests that firms strategically alter their formal structures to maintain pay disparities while appearing compliant. Our findings contribute to the literature by highlighting the unintended consequences of pay transparency policies, identifying organizational design as a key mechanism through which policies shape internal structures, and providing robust causal evidence on job proliferation. These insights underscore the need for policymakers to anticipate strategic organizational responses to ensure the effectiveness of equity-promoting regulations.
