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

Sourav Sinha

Papers from arXiv.org

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.

Date: 2022-02
New Economics Papers: this item is included in nep-ban, nep-gen and nep-lma
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Citations: View citations in EconPapers (2)

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