The role of informal wage negotiations and formal promotion processes in explaining the gender wage gap

Abstract

This paper provides estimates of the impact of gender differences in attempts to negotiate over wages and in wage outcomes of formal promotion processes. The research concerns a question about which there is little survey-based empirical evidence. The paper extends the existing literature by using large-scale survey data from the Australian Workplace Relations Survey 2014. The main findings are that women are less likely to attempt to negotiate over their wages and, if they do attempt negotiation, are less likely to be successful. There are no gender differences in application for promotion or in success rates, but successful promotion applications have a slightly larger positive impact on the wages of men.