Closing the gap: An experimental design to anchor beliefs
The previous evidence shows that women’s negotiation skills at the bargaining table are a crucial determinant of salary differences between men and women. Therefore, policies aimed at reducing these gendered differences in negotiation could serve as a vital step toward more equitable labor markets.
We leverage this by estimating the market-level effects of an unanticipated policy that increased women’s ask salaries by changing the way in which salaries were asked to candidates. Before the reform, the asking salary was an empty text field that candidates were asked to submit. After the reform, the field was pre-filled with the median bid salary over the last twelve months for a comparable candidate on the platform. This shift gave candidates information on the typical offers received by similar candidates on the platform, giving them an anchor to benchmark their own ask salary. Using an Interrupted Time Series design, we compare individuals who created a profile before and after the change to isolate the reform’s effect on ask salaries and bid salaries.
Figures 3 and 4 plot the time series of average ask and bid salary after netting out for resume characteristics. Before the feature change, the evolution suggests that salaries would have continued to evolve in parallel but at different levels in the absence of the feature change. Then, we observe a striking jump in female ask, bid, and final salaries to the level of men’s salaries. The narrowing of the gap between the two lines persists several months after the change.
In the pre-reform period, the ask gap was 2.9%, which essentially went to zero after the reform. This pattern is led by women asking for more rather than by men asking for less. In particular, the reform led women to ask for 3.2% more while men continued asking for roughly the same as they would have otherwise. On the same line, the bid gap narrows from 2.5% to -0.3% after the reform. This result is mainly driven by the fact that women are offered 2.6% more, and men are offered about the same as they would have been offered absent the reform. Women were not penalized for increasing their ask salary as there was no decrease in the number of bids they received.