The effects of salary history bans on wages, hiring, and wage gaps
Abstract
Abstract This paper provides a theoretical analysis of salary history bans, which prohibit firms from inquiring about applicants' prior wages. When salary histories are banned, firms cannot tailor their wage offers to the applicants' prior wages and thus offer the same wage to each group of workers. While this benefits relatively low earners, the wage gap between groups may widen. Salary history bans also affect (young) workers' behavior in initial negotiations, where they act less aggressively and demand lower wages. Finally, salary history bans are shown to reduce worker turnover, but to increase the hiring of younger workers.
Fields of Study & Subjects
Labor market dynamics and wage inequality
Experimental Behavioral Economics Studies
Economic Policies and Impacts
Publication details
- Journal / source
- Economic Inquiry
- Publisher
- Wiley
- Volume
- 64
- Issue
- 3
- Pages
- 916–930
- Publication date
- 5 May 2026
- Language
- EN