Salary History and Employer Demand: Evidence from a Two-Sided Audit

101 Pages Posted: 11 Oct 2021 Last revised: 9 Oct 2022

See all articles by Amanda Y. Agan

Amanda Y. Agan

Rutgers University, Department of Economics

Bo Cowgill

Columbia University - Columbia Business School

Laura Gee

Tufts University; IZA

Date Written: September 23, 2021

Abstract

We study how disclosures of salary history affect employer demand using a two-sided natural field experiment featuring hundreds of recruiters evaluating over 2,000 job applications. In the experiment, we randomize the presence of salary history questions as well as the candidates' disclosures. We find that employers make negative inferences about non-disclosing candidates, and view salary history as a stronger signal about competing options than worker quality. Disclosures by men (and other highly-paid candidates) yield higher salary offers, however they are negative signals of value (net of salary), and thus yield fewer callbacks. Male wage premiums are regarded as a weaker signal of quality than other wage premiums (such as working at higher paying firms, or being well-paid compared to peers).

Keywords: J71, M51, C93

JEL Classification: Blinding, disclosure, recruiting, statistical discrimination, salary history, field experiments.

Suggested Citation

Agan, Amanda Y. and Cowgill, Bo and Gee, Laura, Salary History and Employer Demand: Evidence from a Two-Sided Audit (September 23, 2021). Available at SSRN: https://ssrn.com/abstract=3929578 or http://dx.doi.org/10.2139/ssrn.3929578

Amanda Y. Agan

Rutgers University, Department of Economics ( email )

New Jersey Hall
75 Hamilton St
08901, NJ Princeton 08540
United States

HOME PAGE: http://https://sites.google.com/site/amandayagan/

Bo Cowgill (Contact Author)

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Laura Gee

Tufts University ( email )

Medford, MA 02155
United States

IZA

P.O. Box 7240
Bonn, D-53072
Germany

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