We leverage this distinction between vertical and horizontal wage dispersion to identify the mobility-reducing effect of unequal pay and to separate it cleanly from the mobility-inducing effect, well-established in the literature. 2 We propose that pay dispersion suppresses inter-firm mobility when wage differentials are vertical. These differences in pay are likely to reduce inter-firm mobility because vertical dispersion is associated with beneficial employee outcomes, such as opportunities for internal advancement and aspirational comparisons. Conversely, pay dispersion will increase inter-firm mobility when such differentials are horizontal. Because these differences in pay are associated with harmful employee outcomes, such as negative social comparisons, fairness concerns, and limited advancement prospects, they will motivate workers to switch employers, generating the "mobility-inducing effect," frequently seen in past research. We take advantage of the numerous empirical benefits of the large Swedish employee-employer matched panel data for the period 2001-2008 to test our arguments. Whereas many organizations observe policies of pay secrecy (Belogolovsky and Bamberger, 2014; Collela, et al., 2007), Sweden has had a long history of financial transparency since 1903, when tax returns became public. The Swedish sample merges data from the Firm Financial Statistics Database (Foretagens ekonomi [FEK]), containing the annual accounts of all limited liability firms in Sweden, acquired from the Swedish Companies Registrations Office, and the Longitudinal Integrated Database for Medical Insurance and Labor Studies (LISA), which draws on several different individual-level statistics obtained from registry databases for the entire Swedish population. Using these fine-grained population data on all firms, employees, and their occupational information, we identify all instances of mobility, including remaining in current employment, advancing internally, or moving externally to another employer. We further compute detailed and precise measures of horizontal and vertical dispersion in wages, based on hierarchical occupational classification (Tåg, Åstebro and Thompson, 2016). We find systematic evidence that the effect of wage dispersion on inter-firm mobility critically depends on the organizational level at which wages are dispersed: vertical variance in pay reduces 2 Although bases for vertical and horizontal pay dispersion are not comparable, past studies have treated the two as equivalent, and scholars linked the two with similar mechanisms and similar mobility outcomes (