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

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  • Andreas Leibbrandt
  • John A. List

Abstract

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.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18511.

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Date of creation: Nov 2012
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Handle: RePEc:nbr:nberwo:18511

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  1. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away from Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, MIT Press, vol. 122(3), pages 1067-1101, 08.
  2. Goldin, Claudia, 1992. "Understanding the Gender Gap: An Economic History of American Women," OUP Catalogue, Oxford University Press, number 9780195072709.
  3. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 75-99, Fall.
  4. Uri Gneezy & Muriel Niederle & Aldo Rustichini, 2003. "Performance In Competitive Environments: Gender Differences," The Quarterly Journal of Economics, MIT Press, vol. 118(3), pages 1049-1074, August.
  5. Shelley Phipps & Peter Burton & Lynn Lethbridge, 2001. "In and out of the labour market: long-term income consequences of child-related interruptions to women's paid work," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 411-429, May.
  6. Jeffrey A. Flory & Andreas Leibbrandt & John A. List, 2010. "Do Competitive Work Places Deter Female Workers? A Large-Scale Natural Field Experiment on Gender Differences in Job-Entry Decisions," NBER Working Papers 16546, National Bureau of Economic Research, Inc.
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Cited by:
  1. Brenzel, Hanna & Gartner, Hermann & Schnabel, Claus, 2013. "Wage posting or wage bargaining? Evidence from the employers' side," Discussion Papers 85, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  2. Stefan Bauernschuster & Anita Fichtl, 2013. "Brauchen wir eine gesetzliche Frauenquote?," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 66(02), pages 39-48, 01.
  3. Ghazala Azmat & Barbara Petrongolo, 2014. "Gender and the Labor Market: What Have We Learned from Field and Lab Experiments?," CEP Occasional Papers 40, Centre for Economic Performance, LSE.
  4. Kaiser, Lutz C., 2014. "The Gender-Career Estimation Gap," IZA Discussion Papers 8185, Institute for the Study of Labor (IZA).
  5. Meghan R. Busse & Ayelet Israeli & Florian Zettelmeyer, 2013. "Repairing the Damage: The Effect of Price Expectations on Auto-Repair Price Quotes," NBER Working Papers 19154, National Bureau of Economic Research, Inc.
  6. Sloczynski, Tymon, 2013. "Population Average Gender Effects," IZA Discussion Papers 7315, Institute for the Study of Labor (IZA).

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