The Effect of Salary History Bans on Labor Market Reattachment

Intended to reduce wage disparities and promote equity in hiring, Salary History Bans (SHBs) prohibit employers from inquiring about job applicants' current or previous salaries during the hiring process. I first develop a search and matching model showing that information frictions introduced by SHBs lengthen unemployment duration and generate higher reemployment wages for workers who voluntarily reveal their past salaries, while non-revealers earn lower wages. Then, I examine the impact of these bans on unemployment duration, weekly earnings, and job transitions among displaced workers by employing a difference-in-differences approach that leverages the staggered implementation of SHBs across states. The empirical analysis shows that these policies increase unemployment duration by approximately 19 percent and reduce the probability of full-time employment by 4.8 percentage points, with both effects driven by impacts among women. I also find a negative and statistically significant effect on women's wages, widening the gender pay gap by 12.5 percent. Using machine learning to construct market wage benchmarks, I further show that SHBs lead to substantial reemployment wage penalties for previously low-paid women. These findings highlight the potential effects of SHBs on gender equity in the labor market and job-matching efficiency.

The Collateral Channel of Renovation Loans (with Yeonjoo Son) 

(Draft available upon request)