Law Commons^™

Perpetuating Inequality: What Salary History Bans Reveal About Wages, James Bessen, Chen Meng, Erich Denk

Faculty Scholarship

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 (6.4%) and non-whites (7.7%). Bargaining behavior appears to account for much of the persistence of residual wage gaps.