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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.

Suggested Citation

  • Andreas Leibbrandt & John A. List, 2012. "Do Women Avoid Salary Negotiations? Evidence from a Large Scale Natural Field Experiment," NBER Working Papers 18511, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18511
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    References listed on IDEAS

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    1. 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.
    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. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 1067-1101.
    5. Uri Gneezy & Muriel Niederle & Aldo Rustichini, 2003. "Performance in Competitive Environments: Gender Differences," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 1049-1074.
    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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    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J0 - Labor and Demographic Economics - - General

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