Negotiation and the Gender Gap Depend on Whether Asking Is Allowed

What the research found

A common explanation for the gender pay gap is that women avoid salary negotiations. Leibbrandt and List (2015) tested this with real job openings in the US.

The researchers posted real job ads and randomly assigned nearly 2,500 job seekers to ads that described the contract in different ways. When the ad did not say that wages were negotiable, men were more likely to negotiate for higher pay, and women were more likely to signal that they would work for less. When the ad stated explicitly that wages were negotiable, these differences disappeared completely.

The study also looked at who applied where. Men, unlike women, preferred jobs where the rules for setting pay were ambiguous. As a result, the gender gap was much larger in jobs that left negotiation unclear.

In Sweden, Säve-Söderbergh (2019) studied actual salary negotiations between recent university graduates and employers. Women stated a salary request more often than men did, but they asked for less, and they were offered lower starting salaries even when they asked for the same amount. The gender gaps in starting pay were small, and once the lower requests were taken into account, the gap largely shrank and in some cases closed.

How to read it

The US study randomly varied the wording of job ads, so it supports a causal statement: changing the wording changed the gender gap in negotiating. It is one set of US job ads at one point in time, though, and the size of the effect may differ in other countries and workplaces.

The Swedish study uses real negotiation data but is not an experiment. It cannot fully separate whether lower requests caused lower offers, or whether something else pushed both down. The finding that women were offered less for the same request also shows that part of the gap is not something individuals can close through their own effort.

We did not find empirical studies on salary negotiation and the gender pay gap in Japan.

Taken together, the two studies suggest that negotiating is not just a fixed personality trait. It depends a lot on whether the rules of the situation are clear.

A small step for today

• Check whether you can ask. Look at the job posting or your company’s pay rules to see whether pay or grade is open for discussion. If it is unclear, it is fine to ask: “Is there any room to discuss the terms?” Asking is itself a way of making the rules clear.
• Decide your request in advance. Research the market and prepare a number you can justify. In the Swedish data, the size of the request was where the difference showed up.
• If you manage a team, write the rules down. The US experiment suggests that stating clearly what can be negotiated in hiring and raises narrows the gap between people who ask and people who don’t.

Tick “Prepared for a negotiation” in the app on any day you do one of these.

Sources

• [C8] Leibbrandt & List (2015) Do Women Avoid Salary Negotiations? Evidence from a Large-Scale Natural Field Experiment. Management Science.
• [C9] Säve-Söderbergh (2019) Gender gaps in salary negotiations: Salary requests and starting salaries in the field. Journal of Economic Behavior & Organization.