What determines the gender pay gap in academia?

This paper focuses on two mechanisms that could explain the persistence of the gender pay gap – salary negotiations and child penalty. The academic sector is studied using administrative data from the University of Tartu, the largest university in Estonia. Data on academic staff from 2012 to 2021 have been merged with the population register and web-scraped data from Scopus. The role of negotiations is evaluated by deriving, for each academic field, their outside option earnings using administrative records of graduates, and the Oaxaca-Blinder decomposition is applied to evaluate whether men and women leverage this outside option differently in their salaries in academia. The child penalty in academia is estimated using a quasi-experimental event-study approach where we exploit the panel dimension of our data. We find that men obtain higher returns than women from the same outside option during salary negotiations. Given that men and women are subject to evaluation and wage negotiations with equal frequency in academia, we assign this gap to women being less effective negotiators. We find the child penalty for women in academia to be short-lived, resulting from a decline in working hours equal to two and a half years of full-time work spread over five years after childbirth. There is no statistically significant child penalty for women in terms of hourly wages, publications, or citations. Men, in contrast, do not experience any penalties related to children.