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Gender differences in wage expectations: the role of biased beliefs

Author

Listed:
  • Stephanie Briel

    (University of Hohenheim)

  • Aderonke Osikominu

    (University of Hohenheim
    CEPR
    CESifo
    IZA)

  • Gregor Pfeifer

    (CESifo
    IZA
    University of Sydney)

  • Mirjam Reutter

    (European University Institute)

  • Sascha Satlukal

    (University of Hohenheim)

Abstract

We analyze gender differences in expected starting salaries along the wage expectations distribution of prospective university students in Germany, using elicited beliefs about both own salaries and salaries for average other students in the same field. Unconditional and conditional quantile regressions show 5–15% lower wage expectations for females. At all percentiles considered, the gender gap is more pronounced in the distribution of expected own salary than in the distribution of wages expected for average other students. Decomposition results show that biased beliefs about the own earnings potential relative to others and about average salaries play a major role in explaining the gender gap in wage expectations for oneself.

Suggested Citation

  • Stephanie Briel & Aderonke Osikominu & Gregor Pfeifer & Mirjam Reutter & Sascha Satlukal, 2022. "Gender differences in wage expectations: the role of biased beliefs," Empirical Economics, Springer, vol. 62(1), pages 187-212, January.
    • Handle: RePEc:spr:empeco:v:62:y:2022:i:1:d:10.1007_s00181-021-02044-0
    DOI: 10.1007/s00181-021-02044-0
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    Cited by:

    1. Lukas Kiessling & Pia Pinger & Philipp Seegers & Jan Bergerhoff, 2023. "Gender Differences in Wage Expectations and Negotiation," ECONtribute Discussion Papers Series 268, University of Bonn and University of Cologne, Germany.
    2. Adamecz-Völgyi, Anna & Shure, Nikki, 2022. "The gender gap in top jobs – The role of overconfidence," Labour Economics, Elsevier, vol. 79(C).
    3. Lukas Kiessling & Pia Pinger & Philipp Seegers & Jan Bergerhoff, 2024. "Gender Differences in Wage Expectations and Negotiation," CRC TR 224 Discussion Paper Series crctr224_2024_496, University of Bonn and University of Mannheim, Germany.
    4. Lukas Kiessling & Pia Pinger & Philipp Seegers & Jan Bergerhoff, 2023. "Gender Differences in Wage Expectations and Negotiation," CESifo Working Paper Series 10838, CESifo.
    5. Ana Fernandes & Martin Huber & Giannina Vaccaro, 2021. "Gender differences in wage expectations," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-24, June.
    6. Bonaccolto-Töpfer, Marina & Briel, Stephanie, 2022. "The gender pay gap revisited: Does machine learning offer new insights?," Labour Economics, Elsevier, vol. 78(C).
    7. Bernd Fitzenberger & Roger Koenker & José Machado & Blaise Melly, 2022. "Economic applications of quantile regression 2.0," Empirical Economics, Springer, vol. 62(1), pages 1-6, January.
    8. Koşar, Gizem & van der Klaauw, Wilbert, 2023. "Workers' Perceptions of Earnings Growth and Employment Risk," IZA Discussion Papers 16013, Institute of Labor Economics (IZA).
    9. Maria A. Cattaneo, 2022. "What wages do people expect for vocational and academic education backgrounds in Switzerland?," Economics of Education Working Paper Series 0197, University of Zurich, Department of Business Administration (IBW).

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    More about this item

    Keywords

    Gender pay gap; Wage expectations; Biased beliefs; Decomposition analysis; Conditional quantile regression; Unconditional quantile regression (RIF regression);
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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