Flexible Wages, Bargaining, and the Gender Gap

74 Pages Posted: 5 Oct 2020

See all articles by Barbara Biasi

Barbara Biasi

Yale School of Management; National Bureau of Economic Research (NBER)

Heather Sarsons

University of Chicago - Booth School of Business

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Does flexible pay increase the gender wage gap? To answer this question we analyze the wages of public-school teachers in Wisconsin, where a 2011 reform allowed school districts to set teachers' pay more flexibly and engage in individual negotiations. Using quasi-exogenous variation in the timing of the introduction of flexible pay driven by the expiration of preexisting collective-bargaining agreements, we show that flexible pay increased the gender pay gap among teachers with the same credentials.This gap is larger for younger teachers and absent for teachers working under a female principal or superintendent. Survey evidence suggests that the gap is partly driven by women not engaging in negotiations over pay, especially when the counterpart is a man. This gap is not driven by gender differences in job mobility, ability, or a higher demand for male teachers. We conclude that environmental factors are an important determinant of the gender wage gap in contexts where workers are required to negotiate.

Keywords: gender wage gap, flexible pay, teacher salaries, bargaining

JEL Classification: J31, J71, J45

Suggested Citation

Biasi, Barbara and Sarsons, Heather, Flexible Wages, Bargaining, and the Gender Gap. IZA Discussion Paper No. 13754, Available at SSRN: https://ssrn.com/abstract=3704137 or http://dx.doi.org/10.2139/ssrn.3704137

Barbara Biasi (Contact Author)

Yale School of Management ( email )

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P.O. Box 208200
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National Bureau of Economic Research (NBER)

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Heather Sarsons

University of Chicago - Booth School of Business ( email )

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Chicago, IL 60637
United States

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