How Do Employers Use Compensation History?: Evidence from a Field Experiment
Moshe A. Barach and
No 6559, CESifo Working Paper Series from CESifo Group Munich
We report the results of a field experiment in which treated employers could not observe the compensation history of their job applicants. Treated employers responded by evaluating more applicants, and evaluating those applicants more intensively. They also responded by changing what kind of workers they evaluated: treated employers evaluated workers with 7% lower past average wages and hired workers with 16% lower past average wages. Conditional upon bargaining, workers hired by treated employers struck better wage bargains for themselves. Using a structural model of bidding and hiring, we find that the selection effects we observe would also occur in equilibrium.
Keywords: field experiments; compensation; search and screening (search for similar items in EconPapers)
JEL-codes: J01 J30 M50 M51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp and nep-hrm
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