Gender differences in pre-career salary estimations. A classroom experiment with job offers based on the pay transparency reform in Austria.

Abstract

This paper examines gender differences in estimating the salaries from job offers after the pay transparency reform in Austria, which aims to reduce the gender pay gap by mandating employers to disclose the minimum salary and negotiation options in their job offers. We address common salary offers in the pharmaceutical industry, where market salaries are substantially higher than the minimum salary. An experiment is conducted with 385 graduate students who estimate the negotiable salary for six salary offers of a chosen job. Our results show that, when salary offers are based on minimum salaries, initial gender differences in estimates remain, irrespective of whether the salary is negotiable or not. When a salary-range is shown, however, gender differences disappear completely. The results imply that, reducing the gender gap in salary estimates in asymmetric labor markets necessitates employers to include not only negotiation options, but also the salary range in their job offers.

Keywords: Gender wage gap, Salary estimations, Transparency legislation, Job offers, Classroom experiment, Anchoring

JEL Classification: C90, J16, J33, M50