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The effects of salary history bans on wages, hiring, and wage gaps

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  • Marc Gürtler
  • Oliver Gürtler

Abstract

This paper provides a theoretical analysis of salary history bans, which prohibit firms from inquiring about applicants' prior wages. When salary histories are banned, firms cannot tailor their wage offers to the applicants' prior wages and thus offer the same wage to each group of workers. While this benefits relatively low earners, the wage gap between groups may widen. Salary history bans also affect (young) workers' behavior in initial negotiations, where they act less aggressively and demand lower wages. Finally, salary history bans are shown to reduce worker turnover, but to increase the hiring of younger workers.

Suggested Citation

  • Marc Gürtler & Oliver Gürtler, 2026. "The effects of salary history bans on wages, hiring, and wage gaps," Economic Inquiry, Western Economic Association International, vol. 64(3), pages 916-930, July.
    • Handle: RePEc:bla:ecinqu:v:64:y:2026:i:3:p:916-930
    DOI: 10.1111/ecin.70065
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