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How Do Employers Use Compensation History?: Evidence From a Field Experiment

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  • Moshe A. Barach
  • John J. Horton

Abstract

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 5% lower past average wages and hired workers with 13% lower past average wages. Conditional upon bargaining, workers hired by treated employers struck better wage bargains for themselves.

Suggested Citation

  • Moshe A. Barach & John J. Horton, 2020. "How Do Employers Use Compensation History?: Evidence From a Field Experiment," NBER Working Papers 26627, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:26627
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    Cited by:

    1. Kässi, Otto & Lehdonvirta, Vili, 2018. "Do Digital Skill Certificates Help New Workers Enter the Market? Evidence from an Online Labour Platform," SocArXiv 7tybd, Center for Open Science.
    2. Sourav Sinha, 2022. "US Salary History Bans -- Strategic Disclosure by Job Applicants and the Gender Pay Gap," Papers 2202.03602, arXiv.org.
    3. Benjamin Hansen & Drew McNichols, 2020. "Information and the Persistence of the Gender Wage Gap: Early Evidence from California's Salary History Ban," NBER Working Papers 27054, National Bureau of Economic Research, Inc.
    4. Jeffrey A. Mello, 2019. "Why the Equal Pay Act and Laws Which Prohibit Salary Inquiries of Job Applicants Can Not Adequately Address Gender-Based Pay Inequity," SAGE Open, , vol. 9(3), pages 21582440198, August.
    5. Moshe A. Barach & Joseph M. Golden & John J. Horton, 2019. "Steering in Online Markets: The Role of Platform Incentives and Credibility," NBER Working Papers 25917, National Bureau of Economic Research, Inc.
    6. Khanna, Shantanu, 2020. "Salary History Bans and Wage Bargaining: Experimental Evidence," Labour Economics, Elsevier, vol. 65(C).
    7. Moshe A. Barach & Joseph M. Golden & John J. Horton, 2020. "Steering in Online Markets: The Role of Platform Incentives and Credibility," Management Science, INFORMS, vol. 66(9), pages 4047-4070, September.
    8. Apostolos Filippas & John J. Horton & Joseph M. Golden, 2019. "Reputation Inflation," NBER Working Papers 25857, National Bureau of Economic Research, Inc.
    9. John Horton, 2017. "Price Floors and Employer Preferences: Evidence from a Minimum Wage Experiment," CESifo Working Paper Series 6548, CESifo.

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    More about this item

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • J7 - Labor and Demographic Economics - - Labor Discrimination

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