How do employers use compensation history? Evidence from a field experiment
Published: Journal of Labor Economics 39(1): 193-218 (2021)
Last updated: 2021-01-02
Summary
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.
Paper links
Coverage
If a Law Bars Asking Your Past Salary, Does It Help or Hurt?, The New York Times This is what happens when employers can’t ask job applicants about salary history, MarketWatch
Cite
@article{horton2021howdoemployersusecompensationhistoryevidencefromafieldexperiment,
title = {{How Do Employers Use Compensation History? Evidence from a Field Experiment}},
author = {Barach, Moshe and Horton, John J.},
journal = {Journal of Labor Economics},
year = {2021},
volume = {39},
number = {1},
pages = {193-218},
doi = {10.1086/709277},
url = {https://doi.org/10.1086/709277}
}