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Why is it women find it harder to negotiate for wage increases?

AROUND 10 years ago, a group of graduate students lodged a complaint with Linda Babcock, a professor of economics at Carnegie Mellon University. Their male counterparts in the PhD program were teaching courses on their own, whereas the women were working only as teaching assistants. It was important, because doctoral students who have real time teaching experience are perceived to be have more to offer and are considered better prepared when it comes getting a job. Babcock took the complaint to her boss, and was given a simple explanation. The dean said each of the men had come to him and asked to teach a course, none of the women had. Female students, it seems, had expected someone to send around an e-mail asking: “Who wants to teach?”

This prompted Babcock to start methodically studying gender differences in cases of pay raises, resources or promotions. What she found was that men and women are very different when it comes to opening negotiations. These differences may partially explain the persistent gender gap in salaries, as well as other disparities on how people rise to the top of organisations.

Women working full time earn about 77% of the salaries of men working full time. That does not take differing professions and educational levels into account, but when those and other factors are controlled, for women who work full time and have never taken time off to have children, they earn about 11 percent less than men with equivalent education and experience.

For one early study, Babcock had 74 volunteers play a word game called Boggle. Volunteers were told they would be paid from $3 to $10 for their time. After the game, each student was given $3 and asked if the sum was acceptable. Eight times more men than women asked for more cash. Babcock then ran the experiment a different way. She told a new set of 153 volunteers they would be paid $3 to $10 but added the amount was negotiable. Many more now asked for an increase, but the gender gap remained substantial – 58% of women asked for more, but so did 83% of men.

Another of her studies questioned whether graduating masters students who had job offers had accepted the initial offer or had attempted to negotiate more. Four times as many men – 51% against 12.5% – had tried for a better deal. Those who negotiated were often successful receiving 7.4% more on average, compared with those who did not bargain. Although increases in starting salaries can be modest, small differences can have major effects further down the line. And of course negotiators may win bigger raises over the course of their careers.

Traditional explanations for gender differences that men are more aggressive than women, because of a combination of genetics and upbringing. The solution to gender disparity, this school of thought suggests, is to train women to become more assertive in negotiating. However, a new set of experiments by Babcock and Hannah Riley Bowles (Harvard’s Kennedy School of Government), offers a different explanation. Their study, co-authored by Carnegie Mellon researcher Lei Lai, found that men and women get very different responses when they initiate negotiations. It may be accurate that women often disadvantage themselves by not negotiating, but this study found women’s reluctance was based on realistic and accurate view of how they were likely to be treated if they did. Both men and women were more likely to subtly penalise women who asked for more – the perception was that women who asked for more were “less nice”. “What we found across all the studies was men were always less willing to work with a woman who had attempted to negotiate than with a woman who did not,” said Bowles. “They preferred to work with a woman who stayed mum. But it made no difference to the men whether a guy had chosen to negotiate or not.”

For the study, Bowles and her colleagues divided 119 volunteers at random into different groups and provided them with descriptions of male or female candidates who tried to negotiate a higher starting salary for a hypothetical job, along with descriptions of applicants who accepted the offered salary. The volunteers were asked to decide whether they would hire the candidates, who were all described as exceptionally talented and qualified. While both men and women were penalised for negotiating, Bowles found that the negative effect for women was more than twice that for men.

Subsequent studies used actors who recorded videos of themselves asking for more money or accepting salaries they had been offered. A new group of 285 volunteers were again asked whether they would be willing to work with candidates after viewing the videos. Men tended to rule against women, who negotiated but were less likely to penalise men. Women tended to penalise both men and women who negotiated, and preferred applicants who did not ask for more.

In a final set of studies, Bowles’ team had 367 volunteers play the role of job candidates and left it up to them to decide whether to ask for more money than they were offered. Women were less likely than men to negotiate when they believed they would be dealing with a man, but there was no significant difference between men and women when they thought a woman would be making the decision. The applicants, in other words, were accurately reading how both males and females were likely to perceive them.

The findings, published this year in the journal Organisational Behaviour and Human Decision Processes, may explain why some other studies have reached conflicting conclusions. For example, one study by Barry A Gerhart, then at Cornell University, found little difference between male and female MBA students in whether they negotiated over their starting salary. Similarly, Bowles said, the new study showed that women did not act in the same way at all times. They were more likely to negotiate when dealing with another woman than when dealing with a man.

“It is not that women always act one way and men act another way; it tends to be moderated by situational factors,” Bowles concluded. The point of this paper is that “There is an economic rationale to negotiate, but you have to weigh that against social risks of negotiating. What we show is those risks are higher for women than for men.”

So how do we deal with this cultural conditioning? Can we deal with it or do we just have to accept it? What the research does highlight is that when making policy about equality in terms of pay there are more factors to take into account other than education, gender, job value and location.