The Response of Wages to Rejected Offers

Abstract Using the Survey of Consumer Expectations, which asks employed workers to report their salaries and job offers every four months, we find that rejecting an outside offer has no significant effect on a worker's salary with the current employer, the expected probability that the current employer will match an outside offer with a higher salary, and the worker's satisfaction with the current job, both overall and separately for wages and non-wage benefits. The results suggest that wage renegotiation in response to changes in an employed worker's outside option does not play a significant role for individual wages.