Friday, March 29, 2013

Do women avoid salary negotiations?

Past studies have demonstrated that women earn approximately three-quarters of what men earn and that women represent only 2.5 percent of the highest-paid positions at U.S. firms. Researchers have long sought to identify the source of these wage gaps, which might be differences in human capital, workplace practices such as maternal-leave policies, general discrimination, and differences in competitiveness. Some evidence also suggests that men and women differ in the way that they negotiate for wages, and that women are less likely to engage in salary negotiations at all.

In Do Women Avoid Salary Negotiations? Evidence from a Large Scale Natural Field Experiment (NBER Working Paper No. 18511), co-authors Andreas Leibbrandt and John List report on an extensive nine-city field study which involved advertisements for actual administrative-assistant jobs. They find that in responding to these ads, men are more apt to initiate wage negotiations when there is no explicit statement at the outset that wages are negotiable. Men also generally prefer positions for which the "rules of wage determination" are left ambiguous. However, women become more aggressive in negotiating wages when the advertisement explicitly states that wages are negotiable; this erases and even reverses the gender differences. National Bureau of Economic Research

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