Getty Images; Tyler Le/BIA few years ago, Song Ma, a professor of finance and entrepreneurship at Yale, found himself torn between two competing ideas about the state of the workplace.The first was that the #MeToo movement had generated a powerful wave of reforms to protect victims of abuse. Starting in 2018, states including California, New York, and Washington had passed laws to weaken non-disclosure agreements, which had long been used to silence victims of harassment at work. In 2022, Congress passed the Speak Out Act, which prevents employers from being able to demand workers to sign NDAs preemptively, before an incident or dispute occurs."These were reforms nearly everyone cheered for," says Ma.
"And for good reason."His other idea was that these laws may have backfired, and made it worse for women."As economists, we've learned that well-intentioned labor regulations don't always produce the outcomes we hope for," he says. After the Americans with Disabilities Act came into effect in 1990, he notes, employment among disabled workers declined as some employers avoided hiring them to sidestep compliance costs. Similarly, so-called Ban the Box laws, designed to help people with criminal records get hired, ended up hurting young Black men, because employers fell back on what Ma calls "cruder demographic proxies."
Because of harmful racial and gender stereotypes, Ma explains, hiring managers drew the conclusion that a Black man applying for a job was more likely to have a criminal conviction than a different applicant.So to test whether a similar dynamic was playing out with NDA bans, Ma decided to look at startups. For one, "They're crucial for innovation and job creation, yet often lack formal HR infrastructure," he says. He also knew that harassment had been well-documented in the startup world.Earlier this year, Ma and his collaborators published a paper with his findings: NDA bans weren't always living up to their advocates' expectations.
Startups based in states that had implemented NDA-weakening laws hired about 8% fewer women per year than startups in states that hadn't passed those laws."That's meaningful when you consider the average startup in our sample hires just over one woman per year," he says. "And the effect appeared immediately, persisted for years, and concentrated exactly where you'd expect if firms were minimizing perceived legal risk: among junior women and in small, male-dominated startups with weaker internal safeguards."Put bluntly, companies were once again sidestepping potential repercussions of regulation by simply not hiring people who were most likely to benefit from the new protections.NDA bans also aren't the only recent employment laws designed to create more equitable workplaces that have fallen short and — in the worst cases — even backfired.
Another is mandating employers to post salary ranges.In 2021, The Equal Pay for Equal Work Act went into effect in Colorado. New York and California both passed related laws the following year. States including Maryland, Massachusetts, Connecticut, Nevada, and Rhode Island have adopted similar measures aimed at making pay negotiations less opaque.These were hailed as promising steps toward a more equitable workplace, largely because, as research shows, a lack of pay transparency has long underpinned pay gaps in both gender and race.
In many workplaces, employees have historically been discouraged from discussing salaries, allowing unequal pay for similar roles to go unnoticed for years, or even decades. Women who work full-time in the US earn around 83% of what men do, a figure that's hardly changed in recent decades. For Black and Latina women, the gap is considerably wider at about 66% and 58% respectively.Women show a stronger preference than men for jobs with narrower salary ranges.Yet here too, transparency alone has proven to be an imperfect solution to a complex and entrenched problem.One issue is that salary range laws currently offer little guidance on how wide or narrow the ranges should be.
And that detail, research suggests, can significantly shape how candidates respond to job postings.Alice Lee, an assistant professor of organizational behavior at Cornell, is part of a team that analyzed almost 10 million US job postings. They found that the average salary range posted spanned about $38,000. But variation was enormous: some listings covered $20,000, while others stretched well past $100,000.This discovery got Lee thinking about whether the width of a posted range might affect who decides to apply and how they subsequently negotiate, especially "given that women, on average, tend to be more averse to financial uncertainty," she says. When Lee and her colleagues subsequently studied this, her suspicions were corroborated: Women indeed show a stronger preference than men for jobs with narrower salary ranges."Wider posted ranges were associated with lower representation of women in the workforce, even after accounting for