How do labor markets respond to legal prohibitions of discrimination? Beyond adjusting wages and employment, firms may strategically redesign job titles to preserve pay differentials. Alexander Busch, with Kilian Weil, studies this mechanism in the context of a 1955 German court ruling that mandated the abolition of explicitly gendered job titles. Exploiting staggered renegotiation dates of sectoral bargaining agreements, they show that eliminating "women's wages" reduced the gender pay gap. However, the effect was almost fully offset for women in jobs with no formal training requirements by the introduction of new job titles for "workers in less demanding jobs" (Leichtlohngruppen). Their results highlight how worker reclassification can attenuate the effects of equal pay mandates.
