The wage disparity between men and women can be attributed to differences in their job search behaviour, a new study by the Oxford University Press has found. The study, published in the Quarterly Journal of Economics, suggests that women are more likely to accept job offers early, while men tend to wait for higher-paying offers.
“Our analysis is based on rich information on initial job offers and acceptances from undergraduates of Boston University’s Questrom School of Business. We find (i) a clear gender difference in the timing of job offer acceptance, with women accepting jobs substantially earlier than men, and (ii) a sizable gender earnings gap in accepted offers, which narrows in favour of women over the course of the job search period,” Oxford University Press said in the abstract of the study.
As of 2020, women in the United States earned 84 percent of what men took home, a disparity that has been documented for decades. One of the factors contributing to this inequality is the lasting impact of initial labour market circumstances. Young people who begin their careers during a recession typically have lower pay for at least 10 years compared to those who start during a stronger economic period. Personal characteristics that matter in early-career job searches, such as risk aversion and biased beliefs about earning potential, are likely to matter in subsequent job searches, the researchers found.
While economists have long recognised the impact of gender differences in job search behaviour on early-career gender pay gaps, they have had limited information on job search behaviour and outcomes. To address this, the study's authors surveyed recent undergraduate alumni of Boston University's business school about the job search process that led to their first job after graduating, including the characteristics of their accepted and rejected offers, salary components, job characteristics, job offer timing, and when the offer was accepted or not.
According to the survey, women often accepted jobs one month earlier than males (60 percent of women accepted jobs prior to graduation compared to 52 percent of men). The average gender gap across all accepted offers started at around 16 percent in August of the senior year and declined to about 10 percent eight months after graduation.
The study found systematic patterns between these traits and search outcomes, with more risk-averse individuals reporting lower reservation wages and accepting offers earlier. The results support field observations that men are more likely to have turned down an offer that was greater than the one they ultimately accepted, to be less content with their job search experience, and to look back on some aspect of their job search with regret.
