Gender Differences in Current and Starting Salaries: The Role of Performance, College Major, and Job Title

Abstract

This study examines starting and current salaries of exempt employees hired between 1976 and 1986 by a large, private firm. In 1986 the ratio of women's salaries to men's was 88%. With controls for year of hire, potential experience, degree, college major, firm tenure, performance, and job title, the ratio is 94–95% for the full sample and 97–98% for college graduates. Women's 1986 salary disadvantage can be traced largely to their salary disadvantage at the time of hire: with an adjustment for starting salary, the 1986 salary ratio rises to 96–99% for the full sample and 98–100% for college graduates. The apparently greater female disadvantage in starting salary than in subsequent salary growth may stem from the smaller amount of job-relevant information available on applicants than on current employees.