Women Beat Men in Negotiations When Salary Is Flexible
Women are more likely than their male counterparts to negotiate for higher pay if a job has a flexible salary offer. New research has found that when the salary in a job offer was described as negotiable, 24 percent of women attempted to negotiate salaries. Just 22 percent of men similarly attempted to negotiate.
Men, however, were more likely than women to negotiate for a higher salary when the pay was described as fixed. When responding to an explicit salary offer, 11 percent of men attempted to negotiate salary, while just 8 percent of women attempted to negotiate. Men are also more likely than women to ask for more money in a negotiation when job salaries were fixed.
"We find that simple manipulations of the contract environment can significantly shift the gender composition of the applicant pool," said John List, the Homer J. Livingston Professor in Economics at the University of Chicago. "By merely adding the information that the wage is 'negotiable,'we successfully reduced the gender gap in applications by approximately 45 percent."
List conducted this research along with Andreas Leibbrandt, a senior lecturer at Monash University in Australia, by placing job ads online for administrative assistants in nine major metropolitan areas. The researchers then examined the responses they received from interested applicants.
The researchers received more than 2,400 responses for the ads and determined the gender for more than 2,300 of those respondents based on their names. Two-thirds of those respondents were determined to be women.
When the salary was listed as being fixed in an ad, the probability of applying for that job was 47 percent for men and 32 percent for women. However, when salaries were negotiable, the probability for men dropped to 42 percent while women's probability rose slightly to 33 percent.
List says that these findings regarding salary negotiations can go a long way in helping to try to alleviate the gender gap that exists since it helps improve salary at the start of a job.
The research was published in the National Bureau of Economic Research as a part of the paper "Do Women Avoid Salary Negotiations? Evidence from a Large Scale Natural Field Experiment."
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