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US Salary History Bans -- Strategic Disclosure by Job Applicants and the Gender Pay Gap

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  • Sourav Sinha

Abstract

I study the effects of US salary history bans which restrict employers from inquiring about job applicants' pay history during the hiring process, but allow candidates to voluntarily share information. Using a difference-in-differences design, I show that these policies narrowed the gender pay gap significantly by 2 p.p., driven almost entirely by an increase in female earnings. The bans were also successful in weakening the auto-correlation between current and future earnings, especially among job-changers. I provide novel evidence showing that when employers could no longer nudge candidates for information, the likelihood of voluntarily disclosing salary history decreased among job applicants and by 2 p.p. more among women. I then develop a salary negotiation model with asymmetric information, where I allow job applicants to choose whether to reveal pay history, and use this framework to explain my empirical findings on disclosure behavior and gender pay gap.

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  • Sourav Sinha, 2022. "US Salary History Bans -- Strategic Disclosure by Job Applicants and the Gender Pay Gap," Papers 2202.03602, arXiv.org.
    • Handle: RePEc:arx:papers:2202.03602
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    Cited by:

    1. Eliot L. Sherman & Raina Brands & Gillian Ku, 2023. "Dropping Anchor: A Field Experiment Assessing a Salary History Ban with Archival Replication," Management Science, INFORMS, vol. 69(5), pages 2919-2932, May.
    2. Mask, Joshua, 2023. "Salary history bans and healing scars from past recessions," Labour Economics, Elsevier, vol. 84(C).

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