Do women ask for lower salaries? The supply side of the gender pay gap

The gender gap usually denotes observable differences between men and women that are influenced by the social environment. In the workplace, it refers to systematic differences in job opportunities and salaries (controlling for the characteristics of the job and the employee). Statistics have shown that men often earn more for the same work than women, a difference that may reflect that men work more hours (an aspect compounded by the fact that they work highly-paid overtime) or tend to work relatively more in high-pay activities (horizontal gap), to prevail in top positions within a company (vertical gap), or to be offered lower pay for the same work. Most of these analyses are based on outcomes (actual wages being paid), as it is usually assumed that the gap is driven by a demand bias: for a number or reasons, a male society is willing to pay less for a woman than for a man doing the same task. But is it not possible that the gender gap is already embedded in the labor supply? To what extent the gender pay gap reflects an “ask gap”? More specifically: do women ask for less, for the same exact job? Many factors can determine gender-driven differences in labor supply. For starters, men and women may exhibit gender differences in preferences or self-assessments regarding specific occupational choices. Cortes & Pan (2017) based on features described in the BLS’s Occupational Information Network (or O*NET), document that the female-to-male-ratio (FMR) increases for occupations in a softer competitive environment, exhibiting a larger social contribution, or enjoying greater flexibility and a lower intensity in physical effort; and that more competitive and inflexible environments are associated with a larger gender gap. Kleinjans, Krassel & Dukes (2017) argue that women display a preference for jobs with “occupational prestige” and high social standing (at the expense of a lower wage). Finally, Correll (2001) reports that occupational choices are gender determined: males are perceived (by males and females) as better equipped for math (despite weak supporting empirical evidence in this regard), which in turn may determine performance self-assessment and, ultimately, occupational choices. In addition, it has been pointed out that women prefer to work in female-friendly environments. For example, Lordan and Pischke (2016) find a strong positive relationship between female satisfaction and the female-to-male-ratio, both in the occupation and in the firm, while males either like or are indifferent to the share of males in an occupation. Barbulescu and Bidwell (2013) find that women prefer jobs with better anticipated work-life balance and lower identification with stereotypically masculine jobs, which results in lower expectations of job offer success in male dominated jobs. Another aspect highlighted by the literature relates to women´s relative propensity to wage bargain. On this front, the evidence is mixed. Early studies find that women are less likely than men to initiate negotiations (Babcock & Laschever 2003; Babcock et al 2007), and experimental research has shown that women choose competitive pay-offs to a lesser extent than men (as Datta Gupta et al, 2006 suggests, because of higher risk aversion; see also Niederle & Vesterlund, 2005). However, Artz, Goodhall & Oswald (2016) finds no evidence that women are less prone to requesting wage raises than men, while Kaschner, Kugler, Reif & Brodbeck (2013), based on a meta-analysis of 24 studies that explore gender differences related to wage negotiations, conclude that women have a lower, albeit minor, propensity to negotiate, and Freund, Hüffmeier, Mazei & Stuhlmacher (2014), in another meta-analysis of 51 studies of negotiation outcomes, find that men tend to reach better economic outcomes than women but the difference narrows for women with negotiation experience, or when negotiation ranges are explicitly communicated (a result also reported by Leibbrandt & List (2012). Existing studies on the supply-side determinants of the gender gap based quantitative data on actual asked wages are relatively scarce and yield mixed results. Based on survey where recent social science graduates in Sweden are asked to report their respective bids “for the initial job they got in their field of major”, Save-Soderbergh (2007) finds that women “consistently submit lower wage bids than men do” (due to “lack of incentives to safe promote”). Alternatively, Galperin, Cruces and Greppi (2017), based on a field experiment where 2800 frelancers were asked to apply for a job using an online platform for short-term contracts in Spain (Nubelo), find that “women don´t ask for less”.