A Pay Scale of Their Own: Gender Differences in Variable Pay

Abstract

Using Glassdoor data, we show variable pay accounts for at least one-fifth of the gender pay gap within occupations. Women are 5 percentage points less likely to receive variable pay and receive approximately 20 percent less when they do. Since women are less-represented in variable-paying jobs, they accumulate variable pay less often. This under-representation is related to women applying less to and experiencing worse job satisfaction in such jobs. Salary history bans and policies that promote pay transparency, such as right-of-workers-to-talk and pay disclosure laws, appear ineffective at narrowing the total pay gap by reducing the variable pay gap.

Keywords: Gender gap, variable pay, pay transparency, job search

JEL Classification: J16, J24, M51, M52