New research shatters outdated pay-gap myth that women don’t negotiate

Newswise — For decades, a cottage industry of books and workshops has promised to make women better negotiators and help close the gender pay gap. Yet not only does the pay gap persist, it tends to be larger for women who gain advanced business skills.

New research by Berkeley Haas Professor Laura Kray shows the belief that women don’t ask for higher pay is not only outdated, but it may be hurting pay equity efforts. Contrary to popular belief, professional women now report negotiating their salaries more often than men, but they get turned down more often, Kray found. 

“While men in the past may have been more likely than women to negotiate, the gender difference has since reversed,” says Kray, the Ned and Carol Spieker Chair in Leadership. “Continuing to put the blame on women for not negotiating away the gender pay gap does double damage, perpetuating gender stereotypes and weakening efforts to fight them.”

The new paper, co-authored by Vanderbilt University Associate Professor Jessica Kennedy, PhD 12, and Haas post-doctoral scholar Margaret Lee, is in press in the journal Academy of Management Discoveries.

WAGE GAP INCREASES WITH HIGHER PAY

Overall, the gender wage gap in the U.S. has barely budged over the past 20 years. Last year, women earned about 22% less than men, on average. But broken down by income level, the situation is more nuanced: The gap for middle- and lower-wage women has actually decreased while the gap for those with higher salaries—where there is often more room for negotiations—has increased. 

Statistics for the elite group of women who invest in earning MBA degrees are sobering. Women earn 88% of what men make after finishing their MBA, but only 63% of what men make ten years later, past research by Kray and others has found. This pay gap among MBA graduates “is especially notable considering the nearly identical skills and qualifications held by men and women at the time the degree is conferred,” write Kray and her co-authors.

WOMEN DO ASK

The researchers surveyed a nationally representative sample and confirmed the popular perception that women negotiate less than men and are less successful when they do; and that men are more likely to receive better pay without asking for it.

Yet when Kray and her co-authors analyzed a survey of students graduating from a top MBA program between 2015 to 2019, they found that significantly more women than men reported negotiating their job offers—54% versus 44%.

The researchers then delved into a 2019 alumni survey of 1,900 MBA graduates. The survey asked the MBAs for their salaries, and included a multipronged question about whether they had ever asked for raises or promotions; whether those negotiations had been successful; and whether they had received a raise or promotion without asking.

The analysis confirmed that people who ask for higher pay are indeed more likely to get higher pay than those who don’t ask. “People should be encouraged to ask,” they wrote.

But overall, they found that the women earned 22% less than the men. And other than women’s lower pay, the only differences that emerged along gender lines were that more women than men said they had attempted to negotiate, and more women reported that they had been turned down. 

“Given women’s greater, not lesser, tendency to ask, a gender difference in negotiation propensity cannot account for the gender pay gap found in these alumni data,” the researchers wrote.

REVISITING PAST CONCLUSIONS

Kray and her co-authors also used an updated statistical approach to revisit a 2018 meta-analysis that concluded that women were less likely to initiate negotiations—focusing on the nine prior studies published from 1982 to 2015 that measured gender differences in initiation of salary negotiations.

In their new analysis that parsed out changes in negotiation propensity over time, the researchers concluded that men did report higher rates of negotiating versus women early in the era. However, the gender difference appeared to disappear around 1994 and reversed beginning around 2007. 

The trend has continued to grow since then, Kray says. 

“There’s a good-news story here. Both men and women are negotiating more, and the increase is much greater for women than men,” Kray says. She noted that many factors may have contributed to women’s greater assertiveness over the past two decades, including the emphasis on negotiating and the “lean-in” movement sparked by Sheryl Sandberg’s book.

BLAMING THE VICTIM

Still, the downside of messages like lean-in has been to “blame the victim,” Kray says—putting the onus on women to fix the pay gap by working more and trying harder.

“If people believe men have better outcomes simply because they negotiate and women don’t, then they think we just need to train women to negotiate better rather than fixing a discriminatory system,” Kray says. “We call this a ‘legitimizing myth.’”

To explore attitudes about the causes of the pay gap and support for possible solutions, the researchers next conducted a series of experiments. In one, they asked 500 college-educated people with managerial experience to read a paragraph on the post-MBA pay-gap increase, and asked questions about what they think drives it.  

About 15% mentioned differences in negotiation rates, and almost half mentioned women’s choices—including beliefs that women may be less ambitious, work fewer hours, or have less experience. About 64% mentioned lack of fairness, discrimination, and structural issues, such as the “old boys’ network,” or a glass ceiling preventing women from rising to the top. 

Men were more likely to blame women’s choices for their lower pay, while women were more likely to mention discrimination. But over and above those explanations, men and women thought negotiation rates were a significant contributor to pay disparities. Those who believed more strongly that women’s lower negotiation rates contributed to the pay gap for MBA graduates were less likely to support legislation that prohibits employers from asking prospective employees about their current or past salaries—aimed at correcting past inequities—and more likely to justify the current system. 

HOW GENDER-BASED MESSAGES CAN BACKFIRE 

In one final experiment, Kray and her colleagues showed that messages intended to promote equality in negotiations can contribute to sexist stereotypes. After reading a passage from a book aimed at getting women to negotiate, people were more likely to endorse gender stereotypes than those who read from a gender-neutral negotiations book. 

“Negotiating for pay or promotions is clearly beneficial, and given that negotiation rates are pretty low, there is a lot of room for everyone to do more negotiating,” Kray says. “But it’s time to end the notion that the pay gap occurs because women don’t ask.”

Kray is continuing to investigate the relationship between negotiations and outcomes, including whether the higher rates of women asking but being turned down leads to higher turnover, and whether this reflects negatively on employers. She is collaborating with Haas Dean Ann Harrison, who is focusing her sabbatical this fall on researching the causes of the gender wage gap.