Gender differences in job search and the earnings gap: Evidence from the field and lab

In the recent publication of The Quarterly Journal of Economics, Volume 138, No. 4 (2023), Cortés, Pan, Pilossoph, Reuben, and Zafar investigate the gender-specific dynamics in the job search process and their impact on earnings gaps, utilizing comprehensive data from graduates of Boston University’s Questrom School of Business. The research combines field data and laboratory experiments to uncover the mechanisms driving these disparities. Read here: https://doi.org/10.1093/qje/qjad017

Key findings include:

Women display a significant behavioral difference in job search behavior, accepting job offers notably earlier than men. Approximately 60% of women accept offers before graduation compared to 52% of men, a trend that remains robust across various demographic and academic factors.
Initial job offers show a substantial gender earnings gap, which narrows in favor of women as the job search process progresses. The gender gap in accepted offers decreases from around 16% at the start of the job search to about 10% over subsequent months.
Gender differences in risk aversion and overoptimism regarding potential job offers can explain these empirical patterns. Women's greater risk aversion contributes to earlier acceptance of job offers and forgoing further search for better offers, while men's higher levels of overoptimism lead to turning down good offers to continue searching in the hope of better offers that do not materialize.
Using both field and lab data, the findings emphasize that risk preferences and beliefs significantly shape gender differences in job-seeking behavior, influencing early-career wage disparities among highly educated individuals.

This research contributes to the ongoing discourse regarding gender wage gaps by highlighting the crucial role that psychological factors play in the job search processes. The authors call for further exploration of these behavioral dimensions in labor economics to inform policies to close the earnings gap between genders.

This study reflects C-BID's dedication to understanding the psychological underpinnings of economic behavior and their implications for social equity. By shedding light on the interplay between gender dynamics and job market outcomes, this research provides valuable insights for developing effective strategies to foster equality in professional settings.