Salary History and Employer Demand: Evidence from a Two-Sided Audit
Working Paper 29460
DOI 10.3386/w29460
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We study how salary disclosures affect employer demand using a field experiment featuring hundreds of recruiters and over 2,000 job applications. We randomize the presence of salary questions and the candidates’ disclosures. 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, but are negative signals of value (net of salary), yielding fewer callbacks. Male wage premiums are regarded as a weaker signal of quality than other wage premiums (such as working at higher paying firms).
Non-Technical Summaries
- In 21 states, employers cannot ask job candidates about their salary histories, but employers can nonetheless make inferences based...