Outside Job Opportunities Raise Men’s Pay—but Not Women’s
Men are more likely than women to use outside job opportunities to secure higher pay in their current jobs. This is the finding of a study that the Rockwool Foundation Berlin (RFBerlin) has published as a Research Insight. “Among workers in the same workplace and occupation, men earn on average 8 percent more than women, even in Sweden,” says RFBerlin researcher Dogan Gülümser. Gender differences in wage bargaining are a key driver of this gap. “Gender differences in wage bargaining play an important role in explaining why men earn more than women in otherwise similar jobs,” he adds. “We estimate that renegotiation account for roughly half of the observed gender wage gap.”
The researchers exploit variation in job opportunities arising through the workplaces of employees’ parents and siblings. When a relative’s employer hires new staff, workers gain access to new information about potential jobs and employers. These opportunities provide a credible outside option that can be used either to switch jobs or to negotiate higher pay with a current employer.
The researchers find that when such opportunities arise, men’s wages increase in their current jobs. Women in the same situation, however, experience no comparable wage gains. This is despite the fact that women are just as likely as men to change employers.
“Women appear to respond to outside opportunities by changing jobs rather than using them to negotiate higher wages with their current employer”, says Gülümser. “Men, by contrast, are more likely to obtain pay increases without leaving their employer.”
Importantly, the job opportunities available to men and women were of similar quality. The hiring firms do not differ in terms of wages, productivity, or geographic location. When a relative’s employer hired new workers, the probability of switching to another employer increased fourfold.
The study also shows that the effects are concentrated in jobs where wages can be negotiated individually. Among workers covered by collective agreements that largely determine pay, neither men nor women benefited from pay increases following outside job opportunities. Gender differences emerge only where employers have discretion over wages and employees have room to negotiate.
The findings have implications for current policy discussions on pay transparency. The EU Wage Transparency Directive, to be implemented by June 2026, is expected to improve information about pay differences within firms. However, the study suggests that transparency alone may not eliminate gender pay gaps. “Making wages more transparent is an important step,” says Gülümser. “But our findings suggest that policies encouraging women to negotiate pay more actively and helping firms ensure that wage-setting practices are applied consistently across employees, may also be necessary to reduce gender pay differences.”
Wissenschaftlicher Ansprechpartner:
Dogan Gülümser, d.gulumser@rfberlin.com; 0046 / 793 58 22 40
Originalpublikation:
RFBerlin Research Insight: “The Renegotiation Gap: Why Outside Job Opportunities Widen the Gender Wage Gap”, by Peter Fredriksson, Doğan Gülümser, and Lena Hensvik https://www.rfberlin.com/research-insight/
Weitere Informationen:
https://www.rfberlin.com/wp-content/uploads/2025/09/25071.pdf; “Outside Job Opportunities and the Gender Gap in Pay,” RFBerlin Discussion Paper 71/25, by Fredriksson, P., D. Gülümser, and L. Hensvik;
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