Gender differences in pay satisfaction and pay expectations

Abstract

The existence of a significant wage gap for men and women is longstanding and clearly acknowledged by researchers in a variety of academic disciplines (Becker, 1975; Blau and Kahn, 1994; England et al., 1988). In spite of these differences in pay, women do not report high levels of pay dissatisfaction (Crosby, 1982; Sauser and York, 1978; Smith et al., 1969). What factors account for the absence of pay dissatisfaction and lower pay expectations of women? This study examines and extends the work of Major and Konar (1984) which seeks to explain pay expectations and pay satisfaction of men and women. Prior research concerning this model has typically been based on full-time college students who have little or no full-time work experience. The subjects of the present study have extensive work experience following college and were employed full-time at the time data were collected. This allows us to directly test for the impact of work history on pay satisfaction and pay expectations. This study examines the pertinent literature on equity theory (Adams, 1965) and social comparison theory (Jacques, 1961) as it relates to pay satisfaction and pay expectations. Furthermore, the work of Adam Smith (1937) pertaining to compensating differentials is integrated into our conceptual development of those factors which impact employees' pay satisfaction and pay expectations. We present formal hypotheses on the effects of employees' educational background, work history, family situation, and satisfaction with their current job on their pay satisfaction and pay expectations. The sample and measures used in this study are explained in the methods section. We conclude the paper with an analysis of the results and a discussion of our findings. Implications of our findings for future research and practitioners are discussed along with the strengths and weaknesses of the study. Literature Review and Hypotheses It is well documented that in the United States labor force, men earn more than women. Bureau of Labor Statistics (BLS) data show that in 1997 white women working full-time had weekly earnings equal to approximately 75 percent of the weekly earnings of white men. The figures were lower for black and Hispanic females (Bureau of Labor Statistics, 1997). The gender differential in pay has decreased somewhat during the past two decades; in 1979 the weekly earnings of white females were about 62 percent of white male weekly earnings (Bureau of Labor Statistics, 1994). Despite this pattern of lower earnings among women, field studies of pay satisfaction have found that women are not less satisfied with their pay than men (Crosby, 1982; Sauser and York, 1978; Smith et al. 1969). Consistent with this finding, when pay level has been controlled, women have reported higher pay satisfaction than men (Sauser and York, 1978). Since it is assumed that pay satisfaction depends on whether pay received equals pay expected (Lawler, 1971, 1981), it follows that if women have lower pay expectations, women will be satisfied with lower pay. Jackson and Grabski (1988) and Major and Forcey (1985), as well as Tromski and Subich (1990), have observed that women have lower pay expectations and perceive lower levels of compensation to be fair. Possible Causes of Pay Satisfaction and Pay Expectations Major and Konar (1984) investigated possible causes of gender differences in pay expectations among a sample of graduate and undergraduate students. Consistent with earlier studies, females had lower entry-pay expectations and lower career peak-pay expectations. The proposed explanations for these differences in pay expectations were that women might differ from men in career paths, job inputs, comparison standards and job facet importance. With regard to career path, men and women may select different fields of study in school and may enter different occupations and industrial sectors. Milkovich and Newman (1996) point out that women are more likely to study the social sciences and the humanities, while men are more likely to study engineering and business. …

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