Be Careful What You Switch For: An Investigation of Differential Returns to Employer Changes for Men and Women

Abstract

I use modified difference-in-difference and panel event study techniques on NLSY97 data to investigate if women see lower earnings growth relative to men when they change employers over two-year periods. I find that while voluntary employer changes are associated with increases in wage growth for men in the period of the job switch, women do not absorb the same benefits of job switching. However, the differential returns to job changes for men and women seem to be driven by a baseline gender difference in wage growth rather than a specific difference in the treatment effect of changing employers for women. This suggests that women see lower wage increases than men at both existing employers and prospective employers, meaning that the disadvantage seen among women when changing jobs is likely driven by a systematic undervaluation of female talent as well as differences in work patterns and preferences between men and women rather than scenarios specific to job changing, such as recruitment or job search processes.