Flexible Wages, Bargaining, and the Gender Gap

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 01.06.2021, 14:00 - 15:15

   

Presentation by 

Heather Sarsons (University of British Columbia, Vancouver)
   

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https://us02web.zoom.us/j/87487213161

Meeting ID: 874 8721 3161

   

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 lowered the salaries of women compared with men with the same credentials. This gap is larger for younger teachers and smaller for teachers working under a female principal or superintendent. Survey evidence suggests that the gap is partly driven by women engaging less frequently 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 and that institutions, such as unions, might help to narrow the gender wage gap.

   
   
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