The pursuit of gender wage equality in Pakistan reveals substantial disparities, with women often remaining economically undervalued despite possessing qualifications and contributions comparable to their male counterparts. Women consistently earn less than men for equivalent work. Our study, guided by Dr. Farah Said and facilitated by the Saida Waheed Gender Initiative, delves into two frequently overlooked factors: the negotiation practices among highly educated individuals on the brink of entering the workforce, and the variations in competitiveness between men and women.

Our research revealed intriguing insights into how negotiation behaviours could influence the persistent wage gap between genders. Existing literature suggests that women are less likely than men to negotiate aggressively for higher wages. However, our findings challenge this narrative, offering a hopeful perspective for overcoming economic divides. We employed two primary experiments: The Negotiation Game and The Competition Game, designed to assess the negotiation tactics and competitive behaviours of male and female university students in a controlled environment.

In the Negotiation Game, we investigated how fairness and equity impact negotiation behaviours across genders. Our findings challenge the common hypothesis of significant gender differences in negotiation. When presented with unfair offers, both men and women showed a high propensity to negotiate (86.4%), whereas fair offers saw a much lower negotiation rate (13.6%). This indicates a shared emphasis on fairness regardless of gender. Participants first completed a real effort task involving timed calculations, where women slightly outperformed men, averaging 3.7 correct answers compared to men’s 3. This performance result undermines the notion that higher male wages are justified by superior job performance, suggesting that women have an equally strong basis to negotiate for higher wages.

Following the performance task, participants negotiated wages with a computer-generated manager, resulting in roughly equal wages for both genders—women averaged PKR 168.7 and men PKR 165.6. This parity in outcomes suggests that when provided with a fair and transparent negotiating environment, expected gender differences in negotiation results can be mitigated. Our findings indicate that gender may not be as significant a determinant of negotiation success as previously thought, highlighting the importance of situational fairness in achieving equitable outcomes.

The Competition Game further explored differences in how men and women approach compensation schemes that are laden with risk and competition. This experiment assessed how men and women respond to different compensation schemes — one competitive (tournament style) and one non-competitive (piece rate). The performance under both schemes was similar between genders, debunking the myth that one gender inherently outperforms the other in competitive settings. Although performance levels were comparable, the preferences for compensation schemes varied significantly by gender. About 72.5% of men preferred the competitive tournament scheme, which aligns with riskier but potentially higher rewards. In contrast, 61.5% of women chose the tournament scheme, showing less inclination towards risk. This preference was also reflected in the survey responses, where 75.0% of men favoured performance-based compensation, while a majority of women (65.4%) preferred fixed salaries, citing stability and predictability as their primary reasons.

Here, we observed a clear preference among men for competitive, performance-based pay structures, whereas women favoured fixed salaries that offered stability and predictability. This difference highlights the broader societal norms that encourage risk-taking and competitive behaviours predominantly in men, possibly deterring highly capable women from entering high-stakes roles due to a cautious approach to risk.

Additionally, our study also revealed significant contrasts in how gender constraints are perceived in the workplace and the social costs associated with wage negotiations:

Perceptions of Gender Constraints: Both male and female participants acknowledged that education and work experience are pivotal in influencing potential wages. However, notable differences emerged in how each gender perceived additional constraints. Women in our study were more likely than men to consider their own gender and the gender of their superiors as significant factors affecting their wages. This heightened sensitivity to gender dynamics among women suggests an acute awareness of the potential biases that could affect their career progression and wage negotiations. Such perceptions highlight a significant barrier that women face, which is less acknowledged by their male counterparts.

Social Costs Associated with Wage Negotiations: Our findings also brought to light the significant social costs that women face when engaging in wage negotiations. Women reported a higher likelihood of experiencing backlash or negative consequences from negotiating, which aligns with broader research indicating that women often face severe repercussions for assertive behaviours. This includes negotiating for wages, where societal norms tend to penalise women more than men for such assertiveness. The fear of facing such backlash can deter women from negotiating as actively as men, potentially contributing to ongoing wage disparities.

While our study provides valuable insights, its limitations should be acknowledged. Our sample size was small, and the participants were students from a single private university in Lahore, potentially limiting the generalisability of our findings. Furthermore, the controlled experimental setting does not fully capture the complexity of real-world workplace negotiations. For future research, it is crucial to include a more diverse and larger sample size to enhance the generalisability of these findings across different cultural and economic contexts. Additionally, integrating qualitative methods such as detailed interviews and contextual analyses could further uncover the deeper personal, cultural, and socio-economic factors that influence negotiation and compensation preferences.

Our research has tried to expand the existing body of literature on gender wage disparities by delving into less observable factors such as negotiation preferences and aversion to competition, and how these impact labor market outcomes. By integrating both experimental and survey data, we have provided a comprehensive view of the underlying dynamics that contribute to the gender wage gap. Our findings, particularly highlighting the equal willingness to negotiate wages in a fair and equitable environment among both genders, offer crucial insights for developing targeted interventions to promote equitable participation across genders in various professional fields.

The implications of this study are profound for workplace policies and organisational practices. Recognising that women's avoidance of competitive environments may stem not from a lack of skill but from a preference for less competitive settings, organisations are encouraged to reconsider how they design their promotion and reward systems. To prevent the inadvertent favouring of risk-prone behaviours—which could sideline highly capable women who may not seek out competition—it is essential to implement policies that promote a diversity of leadership styles and reward systems. These systems should recognise and value different but equally important contributions, thus mitigating the underrepresentation of women in fiercely competitive roles.

In conclusion, while our findings indicate that there are no significant gender differences in the willingness to negotiate in a fair setting, they also underscore the importance of considering other factors that may influence the disparities observed in real-world salary negotiations. The notable discovery that men exhibit greater competitiveness highlights the need for future policies to address these complex factors. Organisational practices must evolve to create environments that encourage all high-ability individuals, regardless of gender, to compete and excel, fostering a truly equitable professional landscape.

The authors are a group of passionate researchers dedicated to understanding and addressing the factors that contribute to gender wage disparities in Pakistan, aiming to bridge the gap between academic research and real-world applications.

Notes

• Ortiz-Ospina, Esteban, and Max Roser. “Economic Inequality by Gender.” Our World in Data, Mar. 2018, ourworldindata.org/economic-inequality-by-gender.
• Säve-Söderbergh, Jenny. “Gender Gaps in Salary Negotiations: Salary Requests and Starting Salaries in the Field.” Journal of Economic Behavior & Organization, vol. 161, May 2019, pp. 35–51, https://doi.org/10.1016/j.jebo.2019.01.019.
• Maitra, Pushkar, et al. “The Role of Risk and Negotiation in Explaining the Gender Wage Gap.” Journal of Economic Behavior & Organization, vol. 191, Nov. 2021, pp. 1–27, https://doi.org/10.1016/j.jebo.2021.08.021
• Niederle, Muriel, and Lise Vesterlund. “Do Women Shy Away from Competition? Do Men Compete Too Much?” The Quarterly Journal of Economics, vol. 122, no. 3, 1 Aug. 2007, pp. 1067–1101, https://doi.org/10.1162/qjec.122.3.1067.