Men use external job offers to negotiate better pay

Posted 27th August 2026 • Written by Rob Moss on personneltoday.com • • • • • •

Men are more likely than women to use an external job offer to negotiate better pay at their current employer.

Researchers from Rockwool Foundation Berlin, an institute for the economy and the future of work, found that when women face outside job opportunities, they are almost just as likely to switch employers but, when they don’t, there is no increase in their current pay.

The study, led by Prof Peter Fredriksson from Uppsala University in Sweden, argues that gender differences in negotiation behaviour are the most likely explanation.

“While men’s wages increase when exposed to outside job offers, women’s wages remain largely unaffected,” said the authors. “This discrepancy contributes significantly to the persistence of the gender pay gap, even within the same firm and occupation.”

The researchers developed a model to interpret the patterns observed in the data, and found that women may face larger “negotiation frictions”, either due to renegotiation aversion or due to lower returns to bargaining – even when a credible outside job opportunity exists.

Women move jobs just as often as men when offers arise, but women do not use these offers to renegotiate pay when staying put.

Among blue-collar workers, for whom the research team said wages are set more rigidly, outside opportunities do not raise wages for either gender but still increase job mobility (to an even greater extent than for white-collar workers). Where bargaining is limited, the gender gap in wage responses to outside job opportunities disappears.

Both men and women are more likely to move to higher-paying firms and less likely to accept long commutes, the study found.

Weighing these two factors against each other, women require a wage premium about one and a half times as large as men to accept a longer commute, suggesting stronger location constraints.

The research comes as member states begin to transpose the EU’s Pay Transparency Directive into their own legislation. Just five countries have implemented laws so far (Greece, Italy, Lithuania, Malta and Slovakia), with many others only having draft legislation in place.

As well as requiring employers to publish gender pay gaps, the directive mandates them to share the starting salary or pay range in job ads or before first interview.

The researchers said that information about outside job opportunities is not enough to close the gender pay gap. Women know about outside opportunities and act on them by switching jobs, but they do not use them to negotiate better terms with their current employer.

The team concluded that outside job opportunities play a central role in shaping wage growth. Men use them to raise pay; women usually do not. This difference explains a large share of the gender pay gap that emerges within jobs over time.

The study shows that even in a highly equal labour market like Sweden, where the data came from, gender gaps can grow through wage-setting processes. Closing these gaps requires attention not only to hiring and job choice, but also to how wages are renegotiated once people are already employed.

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