Gender Differences in Job Search and the Earnings Gap: Evidence from Business Majors

66 Pages Posted: 22 May 2021

See all articles by Patricia Cortes

Patricia Cortes

Boston University

Jessica Pan

National University of Singapore (NUS)

Laura Pilossoph

Federal Reserve Banks - Federal Reserve Bank of New York; University of Chicago - Department of Economics

Basit Zafar

Arizona State University

Multiple version iconThere are 2 versions of this paper

Abstract

To understand gender differences in the job search process, we collect rich information on job offers and acceptances from past and current undergraduates of Boston University's Questrom School of Business. We document two novel empirical facts: (1) there is a clear gender difference in the timing of job offer acceptance, with women accepting jobs substantially earlier than men, and (2) the gender earnings gap in accepted offers narrows in favor of women over the course of the job search period. Using survey data on risk preferences and beliefs about expected future earnings, we present empirical evidence that the patterns in job search can be partly explained by the higher levels of risk aversion displayed by women and the higher levels of overoptimism (and slower belief updating) displayed by men. We develop a job search model that incorporates these gender differences in risk aversion and (over)optimism about prospective offers. Our counterfactual exercises show that simple policies such as eliminating "exploding offers" by allowing students to hold onto offers for an additional month, or providing them with accurate information about the labor market, can reduce the gender gap significantly.

JEL Classification: D83, D91, J64

Suggested Citation

Cortes, Patricia and Pan, Jessica and Pilossoph, Laura and Pilossoph, Laura and Zafar, Basit, Gender Differences in Job Search and the Earnings Gap: Evidence from Business Majors. IZA Discussion Paper No. 14373, Available at SSRN: https://ssrn.com/abstract=3851049

Jessica Pan

National University of Singapore (NUS) ( email )

1E Kent Ridge Road
NUHS Tower Block Level 7
Singapore, 119228
Singapore

Laura Pilossoph

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States

Basit Zafar

Arizona State University ( email )

WP Carey School of Business, ASU
Tempe, AZ 85287
United States
9179326564 (Phone)

HOME PAGE: http://https://sites.google.com/site/basitakzafar/

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