Salary History Ban: A Bargaining Experiment

Presenter

Merve Sariisik

Ph.D. Candidate in Economics

University of Michigan

Time and location

North Quad 4330, Wednesday (1:00-2:00) pm

Abstract

One of the most recent actions taken against the gender wage gap is the “Salary History Ban.” SHB laws have been enacted in 17 states and 19 localities since January 2017. The laws are prohibiting prospective employers from asking applicants about their current/past salaries in an attempt to protect those who may have faced discrimination at any point in their careers by not letting the new salaries rely on past salary. Although the motivating argument focuses on alleviating gender pay gap, the laws are changing the dynamics of bargaining and can potentially have unintended consequences. Through a design where “past salary” is a noisy signal of ability, this experiment is aiming to investigate the disclosure decision of “past salary”, the negotiation counterparts’ perception of ability and bargaining outcomes in a lab setting.