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When wages negotiable, women readily make pay deals

Women are more likely to tackle pay talks if an employer makes it clear the salary is negotiable.

Women are more likely negotiate pay deals if a prospective employer indicates wages are up for discussion, a new study has found.

Men have traditionally been seen as more willing to tackle pay talks than women in the past, contributing to the gender wage gap.

The study, titled Do Women Avoid Salary Negotiations? Evidence from a Large Scale Natural Field Experiment and published by the National Bureau of Economic Research, also found that men are more likely than women to initiate salary discussions if the job does not explicitly say that the pay is negotiable.

Researchers from Monash University and the University of Chicago examined job applications from almost 2,500 job-seekers in the US for two admin jobs, one of which listed pay as negotiable and the other did not say.

Over 10% of men initiated pay discussions for the job that didn’t mention whether the salary was negotiable or not, compared to 8.2% of women.

When the pay was listed as negotiable, 23.9% of women started pay talks, compared to 22% of men.

“We report two main findings. First, we find that men prefer workplaces where negotiations are ambiguous, and in such environments they negotiate more than women,” the study said.

“Second, we observe that there are no statistically significant gender differences in the willingness to negotiate wages.”

The researchers concluded that minor changes to job ads or contracts could have big implications for the gender mix of applicants.

“By merely adding the information that the wage is ‘negotiable’ we successfully reduced the gender gap in job applications by approximately 45%,” the authors wrote.

One of the study’s authors, Dr Andreas Leibbrandt from Monash University’s Department of Economics, said in a statement that willingness to negotiate pay was not the only factor contributing to the gender salary gap.

“More research is certainly necessary to improve our understanding of the role of negotiations in workplaces, and we hope that our study motivates further research on negotiations in labour markets,” Dr Leibbrandt said.

Diann Rodgers-Healey, Adjunct Professor at James Cook University and Executive Director of the Australian Centre for Leadership for Women, said the study underlined that “women wait rather than initiate [pay talks], whereas men do that as a matter of course.”

“If workplaces are going to move toward gender equality, they need to take this on board that this is the catalyst for women to go on and negotiate pay,” she said.

“We need to be looking at what we can do to encourage talented women into workplaces.”

Dr Rodgers-Healey urged employers to conduct pay equity audits using the Workplace Gender Equality Agency’s Pay Equity tool.

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