Determinants and Consequences of Salary Negotiations by Male and Female MBA Graduates

Abstract

Although it has been suggested that women negotiate over salaries less frequently than men, there is little empirical evidence on this point. Moreover, outside of laboratory settings, there are no investigations of whether, or to what extent, such negotiations actually pay off in higher salary outcomes for either men or women. The salary negotiating behaviors and starting salary outcomes of 205 graduating MBA students were investigated within a power and dependence theoretical framework. Results did not support the notion that women negotiate less than men. However, women did obtain lower monetary returns from negotiation (4.3% starting salary increment for men versus 2.7% for women). Over the course of a career, the accumulation of such differences may be substantial. Implications and suggestions for future research are discussed.