Gender, Trial Employment, and Initial Salaries

Abstract

Gender disparities in wages among professionals exist because women begin their professional careers making less than men. Prior research indicates this occurs because employers lack information about prospective employees at the hiring stage which triggers discrimination and bias in wage setting. Building on work that suggests organizational practices impact inequality, we examine if trial employment affects initial salaries by providing employers a first-hand look at candidates prior to employers making permanent hiring decisions. Using a unique data set that is well-suited for this inquiry, we find evidence that a female wage discount occurs among entry-level business professionals. However, as predicted, the female wage discount dissipates when offers are received from employers where trial employment takes place.