Women’s tendency to be more financially risk-averse may deter them from applying to jobs with wide salary ranges, according to new research led by Alice J. Lee, assistant professor of organizational behavior at Cornell University.
The authors examined over 10 million U.S. job ads, finding the average posted salary range spread was $38,000 with a standard deviation of over $66,000. Across four studies, the research team found women consistently showed a stronger preference for postings with narrower salary ranges compared to men. Applicants who chose positions with narrower pay ranges tended to negotiate less assertively, were more satisfied with a midpoint salary offer, and made lower counteroffers.
Furthermore, the authors found a similar pattern within the labor market itself; industries with wider posted salary ranges had a lower representation of women in the workforce.
However, the authors identified one method that shifted women’s preferences toward ads with wider salary ranges. In a field experiment, the authors gave some participants additional context for a hypothetical ad’s salary range, with new information outlining expected pay for new hires and the potential for higher compensation based on experience. When job postings included this extra information, the gender gap in preference disappeared and women were more interested in the wider range, while men’s preference remained unchanged. The gender differences in counteroffers also disappeared.
“Pay transparency laws represent meaningful progress. Workers deserve to know what a job pays before they invest time applying for it,” Dr. Lee and her co-authors told the Harvard Business Review. “But transparency without clarity can produce outcomes at odds with the equity these laws aim to promote. As more states adopt disclosure requirements and more companies voluntarily follow suit, employers face a choice: Comply in letter only, or use this moment to make hiring practices genuinely more informative and fair. The difference may shape who walks through your door — and who doesn’t.”
A Cornell faculty member since 2019, Dr. Lee earned her bachelor’s degree in finance from New York University and her Ph.D. in management from the Graduate School of Business at Columbia University.