Do women avoid salary negotiations?

// 27 November 2012



The National Bureau of Economic Research just published a paper on salary negotiations looking at the gender discrepancies. Andreas Leibbrandt and John List studied what was the tendency of someone to negotiate their salary. Here is their 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.

Take home message:

  • Hypothesis is that women avoid salary negotiations.
  • In jobs where wages are not explicitly stated to be negotiable, men were more likely to negotiate.
  • In jobs where wages are negotiable, there is no difference between genders, or may be favourable for women.
  • Men prefer jobs where where their wage rules are ambiguous and thus gender pay gaps are much more pronounced.

So ladies, if we are to minimize the gender pay gap we need to make it a rule to negotiate our wages at every opportunity regardless of the rules.

You can find the study here.

The photo above depicts a woman with the sign with the word “salaire” in focus. It was originally posted by the European Parliament flickr account and is used under the creative commons license.

Comments From You

Megan Stodel // Posted 27 November 2012 at 4:39 pm

I think this study is interesting and it certainly suggests that a more equal pay situation could be achieved through making the negotiation rules explicit. However, I find the following sentence problematic:

“So ladies, if we are to minimize the gender pay gap we need to make it a rule to negotiate our wages at every opportunity regardless of the rules.”

One of the reasons women often don’t negotiate is because of a (justified) fear of gender blow-back – i.e., it is not “feminine” to negotiate and thus superiors see negotiating activity by a woman as demonstrative of character flaw – i.e. too pushy, too self-involved, too grasping, not collaborative enough – that they wouldn’t see in men, which means women don’t receive the pay rises and have been tainted in the process. Therefore, when the study indicates that women respond more when they see that negotiation is encouraged/permitted, that’s a response to the change in the context of negotiation.

The focus should be on the importance of companies realising the importance of negotiation on equal footing rather than that women should just bite the bullet and negotiate whatever the context, as if they are avoiding it because they are concerned how their superiors will perceive their actions, they might have judged the situation correctly and would be punished for negotiating.

Therefore, I suppose, my general point is that at the heart of the matter are structural inequality and biased gender constructions that truly need addressing across the workplace and society.

Josephine Tsui // Posted 27 November 2012 at 4:44 pm

Thanks Megan.

I totally agree. It is not the onus of women to minimize the gender pay gap.

For me though, this highlights how the game is structured. It gives me hints with how to play the game (but we definitely need to change the rules of the game to make a long lasting change).

Lucy // Posted 27 November 2012 at 5:59 pm

I agree with Megan, it isn’t as easy and straightforward as it seems to be on paper. From my own personal experience working in industry, most employers will try to pay you as little as they can get away with – which, in some cases, is less dramatic then it sounds. For instance, if you are an Engineer and there is a lack of skilled personnel in your area of expertise, employers will try to offer more lucrative deals to you.

However, if you are in competition for a job with lots of others of similar skill/experience level, you are definitely not in a great position to negotiate a higher salary.

The problem, as Megan stated in her comment, is that gender bias will show most clearly in this type of situation – women are often expected to be passive and keep quiet. I suppose some employers still have the mindset that – given that there is a chance we might get pregnant and cease to be productive in their sense – we should be grateful we scored a job at all.

So I think the reason why women tend to be more passive in an environment were wage negotiations are not directly encouraged is probably in large part due to the uncertainty as to how the employer will react on the basis of gender bias.

Also, I think the conclusive statement of this piece is a bit problematic in that it could be taken to suggest that women themselves are responsible for the gender pay gap. I know this is probably not the spirit it was written in, but it could be read that way.

Feminist Avatar // Posted 27 November 2012 at 11:19 pm

Why should the onus be on us to negotiate for our wages. Surely, we deserve our pay for good work, not for our ability to negotiate (unless that’s actually your job), or to be able to figure out the game. Why do we live in a world where wages need to be a secret handshake. Pay people for their work and pay people the same money for the same work. It’s easy.

Artemis // Posted 28 November 2012 at 11:07 am

This is the reality of ‘equality’ because the baseline is defined by men’s experiences of the workplace. Therefore women are to blame for not negotiating salary increases because they are not enacting male-centric behaviour.

In other words male dominated and male controlled workplaces are once again justifying their right to deny female employees salary increases. A neat way of denying how male-centric politics operate within the supposedly ‘gender neutral workplace.’

Cycleboy // Posted 30 November 2012 at 3:31 pm

I wonder whether this is a ‘level’ issue. I am a 55 year old bloke and have never negotiated my salary. Like many women state, I would feel very uncomfortable initiating such a discussion.

Then again, perhaps it’s an age thing. When I was younger, I worked in engineering, but the salary structure was fixed. If you were a level 2 engineer, you were somewhere on a ladder between two fixed points. You progressed every year to the top. Male, female, black, white or green with yellow dots.

Or, perhaps it’s a level issue. When my brother applied for a very senior position, he was explicitly asked what sort of salary he was expecting. However, I would imagine that someone applying for a more mundane position (shop assistant, lorry driver, even a middle placed engineering post etc) would have little scope for negotiation.

Cycleboy // Posted 30 November 2012 at 10:41 pm

An afterthought to my previous comment:

We often hear of the difference between the salaries of men and women. The number of men AND women who earn over, say £75,000 is supposed to represent about 1% of all wage earners. Consequently, their incomes will have little influence on the median salary. Therefore, I would be genuinely interested to know how many men and women who earn around the median income actually have the opportunity to negotiate their own salary.

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