Flexible Wages, Bargaining, and the Gender Gap

51 Pages Posted: 7 Oct 2020 Last revised: 19 Sep 2022

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

Multiple version iconThere are 2 versions of this paper

Date Written: October 2020

Abstract

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 pre-existing 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.

Suggested Citation

Biasi, Barbara and Sarsons, Heather, Flexible Wages, Bargaining, and the Gender Gap (October 2020). NBER Working Paper No. w27894, Available at SSRN: https://ssrn.com/abstract=3705105

Barbara Biasi (Contact Author)

Yale School of Management ( email )

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Heather Sarsons

University of Chicago - Booth School of Business ( email )

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Chicago, IL 60637
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