Negotiation and Executive Gender Pay Gaps in Nonprofit Organizations

Posted: 5 Jun 2019 Last revised: 31 Aug 2021

See all articles by Andrew Finley

Andrew Finley

Claremont McKenna College - Robert Day School of Economics and Finance

Curtis M. Hall

Drexel University - Bennett S. LeBow College of Business

Amanda Marino

San Diego State University - Fowler College of Business

Date Written: March 11, 2021

Abstract

This study examines gender pay gaps among nonprofit executives and how compensation negotiability influences this disparity. Using tax return data from IRS Form 990 filings, we find that females earn 8.9 percent lower total compensation than men in our sample. Further, we observe that settings more conducive to negotiation manifest in larger pay disparities, whereas settings that limit executives’ opportunities to negotiate, or encourage females in particular to negotiate, produce smaller gender pay gaps. Our nonprofit setting constrains mechanisms such as labor force participation and risk preferences thought to explain the pay gap and our results are robust to using a Heckman correction model and matched samples. 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

Finley, Andrew and Hall, Curtis M. and Marino, Amanda, Negotiation and Executive Gender Pay Gaps in Nonprofit Organizations (March 11, 2021). Review of Accounting Studies, forthcoming, Claremont McKenna College Robert Day School of Economics and Finance Research Paper No. 3385848, Available at SSRN: https://ssrn.com/abstract=3385848 or http://dx.doi.org/10.2139/ssrn.3385848

Andrew Finley

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States

Curtis M. Hall (Contact Author)

Drexel University - Bennett S. LeBow College of Business ( email )

Philadelphia, PA 19104
United States

Amanda Marino

San Diego State University - Fowler College of Business ( email )

San Diego, CA 92182-0763
United States

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