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Do Women Avoid Salary Negotiations? Evidence from a Large Scale Natural Field Experiment

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One explanation advanced for the persistent gender pay differences in labor markets is that women avoid salary negotiations. By using a natural field experiment that randomizes nearly 2,500 job-seekers into jobs that vary important details of the labor contract, we are able to observe both the nature of sorting and the extent of salary negotiations. We observe interesting data patterns. For example, we find that when there is no explicit statement that wages are negotiable, men are more likely to negotiate than women. However, when we explicitly mention the possibility that wages are negotiable, this difference disappears, and even tends to reverse. In terms of sorting, we find that men in contrast to women prefer job environments where the ‘rules of wage determination’ are ambiguous. This leads to the gender gap being much more pronounced in jobs that leave negotiation of wage ambiguous.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
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... A potential explanation is that women exposed to traditional gender ideologies are less competitive and negotiate less for wages due to expectations that men ought to earn the main income and that women's primary responsibility lies within the domestic sphere. Lab experiments support this notion by showing that women are less likely to negotiate for higher earnings in a control condition; however, this difference disappears when perceived social desirability of wage negotiations is changed by explicitly stating that wages are negotiable (Leibbrandt and List 2015). Additionally, discrimination implies that gender ideologies matter not only by altering behavior of wage earners but also by building the foundation of biases against women (Blau et al. 2006, 23). ...
... The remaining slope of gender ideologies is weaker, yet it indicates that societal gender ideologies are also directly associated with the extent that women earn lower wages than men. As discussed before, this might be based on gender ideologies shaping wage negotiation behavior (Leibbrandt and List 2015), perceptions of fair wages (Lang and Groß 2020), discriminatory behavior, or gender differences in further omitted wage-determinants. ...
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... As exemplified by the book Women Don't Ask: Negotiation and the Gender Divide , extensive research indicates that women are less likely to negotiate salaries and, as a result, experience worse economic outcomes Barron, 2003;Kugler et al., 2018;Mazei et al., 2015). For example, Leibbrandt and List (2015) found that when it is unclear whether salaries are negotiable, women negotiate less and receive lower salaries than men. Another study of MBAs found that "only 7% of female students attempted to negotiate their initial compensation as compared to 57% of men. ...
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