Perpetuating Inequality: What Salary History Bans Reveal About Wages
60 Pages Posted: 24 Jun 2020 Last revised: 8 Jul 2021
Date Written: June 2020
Pay gaps for women and minorities have persisted after accounting for observable differences. Why? If employers can access applicants’ salary histories while bargaining over wages, they can take advantage of past inequities, perpetuating inequality. Recently, a dozen US states have banned employer access to salary histories. We analyze the effects of these salary history bans (SHBs) on employer wage posting and pay in a difference-in-differences design. Following SHBs, employers posted wages more often and increased pay for job changers, particularly for women (6.2%) and non-whites (5.9%). Bargaining behavior appears to account for much of the persistence of residual wage gaps.
Keywords: gender pay gap; salary history ban; labor discrimination, wage inequality, wage bargaining
JEL Classification: J16, J31, J71, J78
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