Abstract
We analyze gender differences in expected starting salaries along the wage expectations distribution of prospective university students in Germany, using elicited beliefs about both own salaries and salaries for average other students in the same field. Unconditional and conditional quantile regressions show 5–15% lower wage expectations for females. At all percentiles considered, the gender gap is more pronounced in the distribution of expected own salary than in the distribution of wages expected for average other students. Decomposition results show that biased beliefs about the own earnings potential relative to others and about average salaries play a major role in explaining the gender gap in wage expectations for oneself.
Highlights
Pay differences between men and women are one of the most intensively investigated phenomena in economics
Our results suggest that biased beliefs play a major role in explaining gender differences in wage expectations
The gender gaps displayed in the second row of both panels are estimated by unconditional quantile regressions (UQR) and, can be interpreted as the adjusted gender differences in the unconditional distribution of wage expectations
Summary
Pay differences between men and women are one of the most intensively investigated phenomena in economics. Our decomposition results show that differential sorting of men and women into fields of study is strongly related to the gender gap in expected own and expected average salaries. After accounting for biased beliefs, the contribution of field of study to Gender differences in wage expectations: the role of. Kiessling et al (2019)—who analyze wage expectations of advanced students in Germany—find significant gender gaps in the expected starting salary and expected lifetime earnings. Their results suggest that a substantial part of the gap can be attributed to gender differences in sorting into fields of study as well as personal style in pay negotiations.
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