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Do Workers Comply with Salary History Bans? A Survey on Voluntary Disclosure, Adverse Selection, and Unraveling

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  • Amanda Agan
  • Bo Cowgill
  • Laura Katherine Gee

Abstract

Salary history bans forbid employers from asking job candidates to disclose their salaries. However, applicants can still volunteer this information. Our theoretical model predicts that the effect of these laws varies by how workers comply. Our survey of Americans in the labor force finds candidates fall into three compliance types: 25 percent always disclose their salary whether asked or not, 17 percent never disclose, and 58 percent comply with the ban. Importantly, compliance type varies by demographics (e.g. always-disclosers are more male, compliers are more female), and workers are more likely to disclose as others do the same, which suggests unraveling.

Suggested Citation

  • Amanda Agan & Bo Cowgill & Laura Katherine Gee, 2020. "Do Workers Comply with Salary History Bans? A Survey on Voluntary Disclosure, Adverse Selection, and Unraveling," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 215-219, May.
    • Handle: RePEc:aea:apandp:v:110:y:2020:p:215-19
    DOI: 10.1257/pandp.20201123
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    References listed on IDEAS

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    1. David Card & Alexandre Mas & Enrico Moretti & Emmanuel Saez, 2012. "Inequality at Work: The Effect of Peer Salaries on Job Satisfaction," American Economic Review, American Economic Association, vol. 102(6), pages 2981-3003, October.
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    Cited by:

    1. Benjamin Hansen & Drew McNichols, 2020. "Information and the Persistence of the Gender Wage Gap: Early Evidence from California's Salary History Ban," NBER Working Papers 27054, National Bureau of Economic Research, Inc.
    2. Mask, Joshua, 2023. "Salary history bans and healing scars from past recessions," Labour Economics, Elsevier, vol. 84(C).
    3. Lalive, Rafael & Card, David & Colella, Fabrizio, 2021. "Gender Preferences in Job Vacancies and Workplace Gender Diversity," CEPR Discussion Papers 16619, C.E.P.R. Discussion Papers.
    4. Khanna, Shantanu, 2020. "Salary History Bans and Wage Bargaining: Experimental Evidence," Labour Economics, Elsevier, vol. 65(C).
    5. Sourav Sinha, 2022. "US Salary History Bans -- Strategic Disclosure by Job Applicants and the Gender Pay Gap," Papers 2202.03602, arXiv.org.

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    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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