How Disclosing Salary Ranges Affects Job Applications and Negotiation Decisions
By Alice Lee, Assistant Professor of Organizational Behavior
In ongoing research with ILR Associate Professor Tae-Youn Park, I have been examining how recent pay transparency policies (i.e., policies that require employers to disclose salary ranges of current employees) affect job application and negotiation decisions.
While these policies aim to mitigate gender pay discrimination, the discretion employers have on setting the actual size of the pay range creates an interesting question on how varying ranges might differentially affect potential applicants.
Specifically, we have explored whether there is a gender difference in application preferences to job postings with wider vs. narrower pay ranges and how this affects subsequent negotiation behavior.
In a series of studies, we find that women (vs. men) are more likely to apply to jobs that post a narrower (e.g., $14-16 per hour) versus wider (e.g., $11-19 per hour) pay range, and that this decision is driven by a greater aversion to risk and higher apprehension towards negotiations compared to men.
Furthermore, among those that do apply to the wider pay ranges, we continue to observe a gender gap in the counteroffers applicants make to the posting (i.e., women make lower counteroffers), raising questions about the efficacy of such policies in sufficiently addressing the gender pay gap.
About Alice Lee
Alice Lee is an Assistant Professor of Organizational Behavior at the ILR School.
Professor Lee examines key features of social influence, where one person makes an overture toward another in the hopes of achieving a particular economic or subjective outcome.