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The role of risk and negotiation in explaining the gender wage gap

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  • Maitra, Pushkar
  • Neelim, Ananta
  • Tran, Chau

Abstract

This paper examines how gender differences in behavioural preferences affect the gender wage gap in Vietnam. We conduct a lab-in-the-field experiment to measure preferences for risk and negotiation and administer a complementary survey to collect data on wages and observable factors that affect wages. In our sample, women earn less than men but differences in observable characteristics across gender cannot explain the gender wage gap, i.e. most of the gender gap is unexplained. Our experimental results show that women are more risk-averse and have a lower propensity to negotiate. The two variables together account for 15.5% of the unexplained component of the wage gap and are jointly associated with a 29% reduction in the gender wage gap.

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  • Maitra, Pushkar & Neelim, Ananta & Tran, Chau, 2021. "The role of risk and negotiation in explaining the gender wage gap," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 1-27.
    • Handle: RePEc:eee:jeborg:v:191:y:2021:i:c:p:1-27
    DOI: 10.1016/j.jebo.2021.08.021
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    Cited by:

    1. Pushkar Maitra & Ananta Neelim, 2024. "Discrimination in Developing Countries," Monash Economics Working Papers 2024-03, Monash University, Department of Economics.
    2. Hrazdil, Karel & Novak, Jiri, 2023. "Executive personality and the gender pay gap," Finance Research Letters, Elsevier, vol. 53(C).

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    More about this item

    Keywords

    Gender wage gap; Discrimination; Risk; Negotiation; Vietnam;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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