Abstract. This paper examines how firms’ uncertainty about match productivity in newly created roles affects hiring decisions, entry wages, and workers’ labor market outcomes. Using Swedish matched employer-employee data, I analyze 1.6 million new matches and showthat firms raise hiring standards by selecting more experienced workers and poaching workers from other firms for the new roles. Workers taking on new roles earn 3% higher entry wages conditional on time-varying and time-invariant worker and firm characteristics. Tenure in new roles is longer on average, leading to an eight percent earnings premium within a given employment relationship. Event study estimates support a causal interpretation of the new job wage premium. This paper sheds light on a previously undocumented source of employer hiring uncertainty - firms’ previous experience in hiring for a particular occupation - which contributes to the wage dispersion among similar workers.

Presentations: UCLS Spring and Annual Meetings, AMSE Conference in Applied Econometrics (Marseille), Nordic Workshop on Register Data and Economic Modelling (Aarhus), IFAU (Uppsala), XVI. Barcelona Labor Economics Meeting (AEET), EALE (Bergen), SUDSWEC (Stockholm 2024), 8th Swedish Conference in Economics (Lund), LSE Labour Workshop, Uppsala PhD Workshop, UCLS PhD Student Workshop

Abstract:  We show that the wages of men and women are differentially affected by outside options, and that these differential responses contribute to the gender pay gap. We develop a simple model of on-the-job search that integrates two crucial gender differences: job preferences and the propensity to renegotiate wages in response to external offers. Both factors contribute to lower wage responsiveness for women when they receive outside offers, and a negative female-male pay gap. However, women's job mobility responses vary depending on the underlying mechanism. To empirically test our model's predictions, we analyze wage and job mobility responses of men and women to external job opportunities, mediated through family networks. Using Swedish register data, we find that improved outside options are associated with higher within-job wage growth for men but not for women. Importantly, we can rule out that these gendered responses arise from differences in the quality of external offers as these are balanced across genders by design. Additionally, men's and women's job mobility responses are very similar. In the light of the model, we attribute these findings to differences in negotiation behavior between men and women. Policies encouraging women to bargain in response to outside options may thus be a powerful tool for reducing the remaining within-job gender gap in pay.

Abstract.  We quantify the role of gender-specific firm wage premiums in explaining the private-sector gender gap in hourly wages using a harmonized research design across 11 matched employer-employee datasets - ten European countries and Washington State, USA. These premiums explain the gender gap when women are less likely to work at high-paying firms (sorting) or receive lower premiums than men within the same firm (pay-setting). We find that firm wage premiums account for a substantial share of variation in gender wage gaps, ranging from 15 to 32 percent. While both mechanisms matter, sorting is the predominant driver of the firm contribution to the gender wage gap in most countries. Three patterns are broadly consistent: (1) women sorting into lower-paying firms becomes increasingly pronounced with age; (2) women are more concentrated in low-paying firms with a high share of part-time workers; and (3) pay-setting gaps are largest in high-wage firms, where women receive about 90 percent of the rents men receive from firm surplus gains.

Abstract. Coming soon.

Abstract: This paper contributes to a better understanding of the role of bargaining and discrimination in the gender wage gap in France and four other European countries using comprehensive linked employer-employee data. The role of bargaining and discrimination is analysed by focusing on systematic differences in wage-setting practices between men and women in the same firm through the estimation of gender-specific firm wage premia. The paper provides three key insights. First, bargaining and discrimination account for only a small part of the gender wage gap in France. Second, the component of the gender wage gap that can be attributed to bargaining and discrimination is higher in high-wage firms in all countries considered. Third, cross-country differences in the importance of bargaining and discrimination in the gender wage gap reflect both systematic differences in wage-setting practices within firms and imperfections in the product market that generate persistent rents.