The gender gap in the wage sensitivity of job transitions: a decomposition analysis

Abstract

Abstract Previous research shows that female workers are less sensitive to wages in their decision to switch jobs than male workers, and that this could explain a substantial part of the gender wage gap. This paper studies to what extent gender differences in preferences and personality traits explain the gender gap in the wage-elasticity of job-to-job transitions in the labor market. Using a novel decomposition approach in the context of mediated moderation and using German Socio-Economic Panel Survey (G-SOEP) data for the period 2005–2019, we find that gender differences in risk preferences, patience, trust, reciprocity, altruism, conscientiousness, ambition and self-esteem explain about 25% of the gender gap in wage-elasticities of job separations. A detailed decomposition suggests that risk preferences, trust and ambition contribute most to this gender gap in wage-elasticity.

Keywords

• Gender
• Economic preferences
• Mediation analysis
• Monopsony power