Negotiation and Executive Gender Pay Gaps in Nonprofit Organizations
48 Pages Posted: 5 Jun 2019 Last revised: 16 Jul 2020
Date Written: July 13, 2020
This study examines gender pay gaps among nonprofit executives and how differences across nonprofit organizations (“NPOs”) in terms of opportunities to negotiate, and female willingness to, influence this disparity. Although our setting constrains mechanisms such as labor force participation and risk preferences thought to explain the pay gap, we nevertheless find, using tax return data from IRS Form 990 filings, that females earn 8.9 percent lower total compensation than men in our sample. Our results are robust to using a Heckman correction model and matched samples. Further, we observe that settings that limit executives’ opportunities to negotiate, or encourage females in particular to negotiate, produce smaller gender pay gaps, whereas settings more conducive to negotiation manifest in larger pay disparities. These findings provide evidence from a large-scale archival dataset of a plausible mechanism for the gender pay gap and point to a potential cost of work environments where negotiations play a larger role in setting compensation.
Keywords: Gender pay gap, Executive compensation, Nonproﬁt organization
JEL Classification: J16, J31, L30, M12
Suggested Citation: Suggested Citation