Pushing the Envelope: The Effects of Salary Negotiations
Salary negotiations are a widespread phenomenon that can shape key labor market outcomes, such as welfare and inequality. We provide novel empirical and theoretical insights into the causes and consequences of salary negotiations. We conducted two field experiments involving over 3,100 job seekers in the U.S. tech sector, designed to examine two types of information frictions. We find that a light-touch encouragement intervention significantly increased both negotiation attempts and compensation gains.