Gender Differences in Negotiation and Job Search: Evidence from Business Majors

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This research project uses sophisticated research methods to explore how gender differences in three specific behavioral traits ? willingness to negotiate, confidence, and risk aversion ? affect job search behavior and, therefore earnings in the marketplace for talented individuals. Despite considerable advances by women in education and the labor market, gender gaps in earnings, particularly among the highly-skilled, continue to persist. This project focuses on less traditional explanations, such as the role of systematic differences in preferences and beliefs between men and women in the job search process in explaining the observed gender wage gaps. The proposed research will be based on a survey of recent business school graduates of Boston University. This is the first study that uses this unique approach to explain the gender wage gap at the beginning of careers. The insights from this research can help individuals make informed decisions in the job search process and enable policymakers to design more effective policy interventions to tackle gender disparities in the labor market. The findings also have implications for how to improve the job search process, such as design of effective recruiting policies and informational interventionsThis research, consisting of two projects, investigates the effects of willingness to negotiate, overconfidence, and risk aversion on the observed gender wage gap. It is based on a large-scale survey of negotiation and job behavior that the researchers conducted among recent undergraduate alumni from Boston University?s Questrom school of Business. The first project is motivated by the empirical observation that women are less likely to negotiate in a variety of settings. The PIs will use a randomized field experiment to assess whether providing information about gender differences in negotiation rates and the efficacy of negotiation is effective in closing the gender gap in negotiation and starting pay among current Questrom business graduates. The PIs will also collect experimentally measured traits to reveal channels through which information impacts graduates. The second project utilizes information on job offers and acceptances from the alumni survey to study the interactions among risk preferences, overconfidence, and job search behavior, and the resulting impact on the gender earnings gap. Because job search is a dynamic process that involves uncertainty, gender differences in preferences and beliefs are likely to lead to gender differences in job search behavior and starting salaries. This project will establish basic facts about gender differences in the job search process, and explore how these relate to gender differences in risk preferences and overconfidence. The PIs will also conduct sequential job search experiments in the laboratory to understand how gender gaps in labor market outcomes evolve under different mechanisms.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.