Tyler Cowen mentions (but doesn't link to!) a NYTimes review of a recent book about how women negotiate, titled "Women Don't Ask".

Most of what the review discusses tracks with typical stereotypes, but one hypothesis stood out to me:

Consider pay. One study found that male graduates of an Ivy League business school negotiated for a 4.3 percent higher starting salary than they were initially offered, while female graduates negotiated for just 2.7 percent. If the first offer was the same for each, say $35,000, this would amount to a $560 advantage for the men.

Over time this advantage could snowball. If men negotiated a 2 percent raise each year and women accepted 1 percent, after 40 years the annual salary would be $79,024 for men and $52,987 for women — nearly a 50 percent gap. The cumulative gap over a career would exceed $440,000.

Professor Babcock and Ms. Laschever [the authors] speculate that much if not all of the male-female gap in earnings can be explained by women's aversion to negotiating.

Fascinating, if true.



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