Right from the start, before even entering the workforce, women expect to earn less than men with comparable work experience and education. Meanwhile, the gender-pay gap continuous to be a tenacious problem. Women still earn less than men despite earning their fair share of post-secondary degrees, participating the labor market, and despite legislation against gender-based salary discrimination.
To better understand why the gender-pay gap persists and provide insights on how to address it, a team of researchers from Carleton University and Wilfrid Laurier University conducted a study to explore how women and men form salary expectations.
The following article highlights the findings of a study authored by:
- Linda Schweitzer, Carleton University
- Lisa Kuron, Wilfrid Laurier University
Exploring the Gender-Salary-Expectations Gap: Back to the Drawing Board
Experts in the field argue that pre-career expectations tend to impact starting salaries as well as increases throughout one’s career. Given this theory, the authors of this study based their research on pre-career adults. They interviewed 22 (12 women, 10 men) undergraduate students, studying business at a Canadian university. The age of the students interviewed ranged between 19 and 24, and the majority (20) were in their third year of a four-year degree.
Traditional explanations for the gender gap in salary expectations
In a previous study, Dr. Schweitzer (with Sean T. Lyons, University of Guelph and Eddy S.W., Ng, Queens University) identified five traditional theories explaining the gender gap in salary expectations and tested them:
- Psychological factors such as self-esteem or self-perception
- Career priorities where women may consider money less important than for example work-life balance
- Self-fulfilling prophecy where women adjust their salary expectations downward based on their awareness of pay discrimination
- Social comparison where men base their expectations on information collected from other men and women from other women, thereby causing women’s salary expectations to reflect the gender pay gap
- Career choices and non-professional interests such as women not pursuing higher-paid careers in traditionally male-dominated fields, or investing less in their careers to prioritize child-rearing
The above researchers, as with those before them were unable to fully explain the gender gap in salary expectations. This study aims to expand on existing knowledge to uncover new factors.
Salary expectations and reasoning
The students seemed realistic in their short-term expectations but seemed to lack insights into how their careers or salaries might evolve in the long term.
“Study participants seemed better informed about their initial job than their potential career advancement and trajectories,” said Dr. Schweitzer.
Initial salary expectations are realistic: Both the women and men who participated in the study had realistic expectations for their initial salary, with the average salary expectation coinciding with previous research and results of a university graduates’ salary survey. Online or in-class research and input from reference persons were the main sources informing salary expectations.
Long-term salary expectations lack realistic basis: Many students interviewed in the study had no objective rationale or no rationale at all for their peak salary expectations. Some, when asked their peak salary expectations, calculated it based a multiplication of their initial salaries. Others referred to subjective self-assessments, such as having high potential or being hardworking. Compared to initial salary expectations, participants seemed to have put little forethought into their longer-term expectations.
Comparing salary expectations of self vs peers
Authors of this study argue that the basis for the salary expectations gap may not be limited to conscious evaluations or psychological factors as previously studied. Dr. Schweitzer explained:
“Without including factors such as personal life experiences or delving deeper into how women and men evaluate themselves and compare themselves against their peers, we have been unable to fully explain gender differences.”
Participants were asked to estimate the salary of a similar other with equal work experience and education. They were then asked to explain why their estimates for their own salary was higher, lower or similar to a comparator.
Below average initial-salary expectations seem based on objective rationale: The participants with below average salary expectations were mostly women and tended to have seemingly objective reasons, such as lack of work experience or having chosen a low-paying specialization.
Men expected above-average salaries based on subjective self-assessment: Interestingly, participants expecting higher initial salaries than their comparators were all male and tended to base their reasoning on subjective self-assessments such as work ethic, a winning personality or networking capabilities.
Most expect to earn more than their peers at the peak of their careers: On average, participants expected their salaries to triple at the peak of their careers. Most participants expected a higher peak salary compared to their comparators. The most mentioned reason for high peak-salary expectations was personal characteristics such as motivation.
Influencing factors beyond traditional explanations
This study revealed a set of factors where women and men may differ in how they interpret similar circumstances, impacting their salary expectations.
According to the authors of this study, when participants were explicitly asked to list their reasons for salary expectations, the answers they provided did not match traditional explanations for the gender gap in salary expectations. However, further discussions with participants about their background and career expectations revealed differences between women and men to be more aligned with traditional explanations for the gender gap in salary expectations. This suggests if gender plays a role in career expectations, it might be subconsciously.
“Negative self-assessments were almost exclusively noted by women and positive self-assessments were often relied upon by men in their estimates of future earnings,” said Dr. Schweitzer.
Women and men might differ in how they interpret objective information: Those expecting a below average initial salary were mostly women. They tended to base their expectations on negative self-assessments of what is usually objective criteria. Case in point, of the women stating lack of work experience for expecting a below average initial salary, most had above average experience for the group. As a mater of fact, one of them had the most experience of all participants.
Men expected salaries to reward their potential before it is realized: In terms of future earning potential, men suggested that they expect to be paid in recognition of their future potential. When discussing peak salary expectations, more women expected to earn above average peak salary than initial earnings. Their explanations suggest that women might only expect to earn a higher salary once they are able to demonstrate their skills and experience.
Women seem to place greater emphasis on their personal lives: More women than men expected child rearing to have a negative impact on their careers. Both women and men assigned equal importance to their careers. However, when discussing career/life value, only women’s personal life scored higher than their careers. This implies that women could be subconsciously making a trade-off between salary expectations and other work conditions such as work-life balance, despite placing similar importance as men on their careers.
Women whose mothers do not work outside the home tend to expect to earn less: Another opposite between women and men was uncovered in discussion of their parent’s careers. Women whose mothers did not work outside the home expected to earn below-average peak salaries. This was not the case for men whose mothers did not work outside the home, suggesting that career expectations for women could be impacted by their mothers’ careers.
Implications and future research
The research team identified the following opportunities to help young women and men form realistic career expectations.
Universities could provide a more holistic view of career options: With many students basing their initial salary expectations on information received in their courses, and having little basis for longer term expectations, there is an opportunity for universities to expand on the career information they provide. A better understanding about the labour market and long-term career paths could help students form realistic expectations about their career options and lead to improved career satisfaction.
Students would benefit from deeper self-awareness of their relative qualifications as well as factors affecting their salary expectations: Opportunities for self-awareness could help students better understand how personal experiences and their interpretations of circumstances could influence their career expectations and create realistic views of the labour market.
Employers could assist new recruits with transparent salary information: Therefore, employers could play a role in helping new recruits create realistic and equitable career expectations by providing transparent and realistic career information.
Future research needs to recognize the limitations of employing surveys or asking participants direct questions with respect to salary expectations, taking care to understand a more holistic perspective. To gain more understanding about the gender gap in salary expectations, the research team suggests future research that explores the following questions:
- How significant are factors beyond traditional explanations for explaining the gender gap in salary expectations?
- What type of information and interventions can be effected to reduce the gap in expectations?
- To what extent does the gender gap in salary expectations among pre-career individuals, predict decision-making, career satisfaction, or future earnings gap between women and men?
When asked about the significance of this study for understanding the gender gap in salary expectations, Dr. Schweitzer said:
“Our study exposes the limitations of traditional salary expectations surveys,” she said. “By considering gendered differences in self-assessment and effects of personal circumstances, we will get closer to understanding why the gap persist and be able to address it.”
Article Notes
Research Highlight writer: This Research Highlight was written by Fiorella Jansen-Nicorescu. CRIW’s Research Highlights share relevant and actionable information about workplace inclusion with a broad audience.
References: This article references work of other scholars, a list of references is available from the first author, Linda Schweitzer.
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Acknowledgements
This study was made possible, in part, through the generous support from the RBC Foundation.
About the Centre for Research on Inclusion at Work (CRIW)
The Centre for Research on Inclusion at Work (CRIW) is a research centre at the Sprott School of Business, Carleton University, focused on conducting and sharing research that advances diversity, equity and inclusion at work. By making research findings available to the public and connecting academia with the broader community, CRIW aims to advance knowledge and drive change towards more inclusive workplaces that welcome and support greater participation of all peoples.