Gender pay gap origin: Women less willing to wait for better job offers

BOSTON — America has a gender pay gap problem, but it apparently starts before women even start going on interviews. A new study finds pay gap issues actually start during the job search. As of 2020, women make 84 percent of what men earn — or 84 cents for every dollar their male colleagues make. Part of the problem, researchers from Boston University say, is that women are more likely to accept job offers earlier than men. Male jobseekers, on the other hand, are willing to wait longer for higher pay.

Looking for a job is a complicated process, and a lot of factors play into whether you want to settle or hold out for a better opportunity. For example, the study finds people living in a recession will likely see lower wages for at least 10 years compared to people who enter the job market during better economic times. Moreover, your personal beliefs in your career search, such as a scarcity mindset or doubting your earning potential, could affect whether you accept a job that’s below your actual pay grade.

The study authors asked graduates from the 2013-2019 graduating classes of Boston University’s business school about their job search process. This included accepted and rejected offers, salary and other benefits, details of the job itself, job offer timing, and whether they ultimately accepted the offer. For the two most recent classes, the team also asked about the students’ subjective beliefs about the number of offers and wage offers they would receive.

Men typically take more risks with job offers

Results show women accepted positions one month earlier than men. For example, 60 percent of women accepted a job before graduation compared to 52 percent of men. There was a clear gender gap in accepted offers as well, with women being more likely to accept one of the first few offers they received. The gender gap for accepted offers went down after graduation.

According to the study authors, men have a greater risk tolerance and overconfidence when it comes to their salary potential. Therefore, they are more willing to hold out until an offer meets their standards. People who like to play it safe reported accepting lower wages and taking offers earlier in the process. Overall, risk preferences explained 20 percent of the gender pay gap in job searches.

“Our study shows that differences in the way men and women search for jobs matter for gender pay gaps in early career,” says Patricia Cortes, a researcher at Boston University and the paper’s lead author, in a media release. “Gender differences in risk preferences and overconfidence about future job offers result in women having lower reservation earnings, which translates into earlier acceptance of lower-paying job offers. Gender differences in these traits may explain as much as 30% of the difference between men’s and women’s earnings in their first jobs.”

The study is published in the Quarterly Journal of Economics.

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