Employer Responses to Pay History Inquiry Bans

49 Pages Posted: 27 May 2020 Last revised: 8 Sep 2020

See all articles by Gurpal Sran

Gurpal Sran

University of Chicago Booth School of Business

Felix Vetter

University of Mannheim

Matthew Walsh

Burning Glass Technologies

Date Written: April 1, 2020

Abstract

We study the effects of pay history inquiry bans on employers’ pay offers and hiring practices. Using salary information on online job postings, we find that posted pay offers decline after the implementation of pay history inquiry bans. We also find some evidence that the number of online job postings increases and that postings are more likely to include salary information. We use census data on new hires and their earnings and find that, while there is a modest closing in gender pay disparity for new hires, the number of new hires declines. Overall, the early evidence on the effects of pay history inquiry bans is consistent with potential employers facing greater information asymmetry, inferring adverse selection in the job applicant pool, and offering lower pay, resulting in modest realized labor market consequences.

Keywords: Pay History Ban, Salary History, Salary History Ban, Salary History Inquiry Ban

JEL Classification: J16, J2, J23, J3, J31, J38, J48, J7, K0

Suggested Citation

Sran, Gurpal and Vetter, Felix and Walsh, Matthew, Employer Responses to Pay History Inquiry Bans (April 1, 2020). Available at SSRN: https://ssrn.com/abstract=3587736 or http://dx.doi.org/10.2139/ssrn.3587736

Gurpal Sran (Contact Author)

University of Chicago Booth School of Business

1101 East 58th Street
Chicago, IL 60637
United States

Felix Vetter

University of Mannheim ( email )

L 7, 3-5
Mannheim, 68161
Germany

Matthew Walsh

Burning Glass Technologies ( email )

One Lewis Wharf
Boston, MA 02110
United States

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