How Do Employers Use Compensation History?: Evidence From a Field Experiment
We report the results of a field experiment in which treated employers could not observe the compensation history of their job applicants. Treated employers responded by evaluating more applicants, and evaluating those applicants more intensively. They also responded by changing what kind of workers they evaluated: treated employers evaluated workers with 5% lower past average wages and hired workers with 13% lower past average wages. Conditional upon bargaining, workers hired by treated employers struck better wage bargains for themselves.
Both Horton and Barach have consulted for the online labor market that was the context of this experiment. For helpful comments and advice, thanks to Ned Augenblick, Amanda Agan, Amanda Pallais, Joe Golden, John Morgan, Liz Lyons, Noam Yuchtman, Paul Oyer, Stan Veuger, and Steve Tadelis, as well as seminar participants at Berkeley/Haas, and Georgetown MSB. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Moshe A. Barach & John J. Horton, 2021. "How Do Employers Use Compensation History? Evidence from a Field Experiment," Journal of Labor Economics, vol 39(1), pages 193-218.