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Understanding the Gender Pay Gap: What's Competition Got to Do with It?

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  • Alan Manning
  • Farzad Saidi

Abstract

A number of papers have recently argued that men and women have different attitudes and behavioural responses to competition. Laboratory experiments suggest that these gender differences are very large but it is important to be able to map these findings into real world differences. In this paper, we use performance pay as an indicator of competition in the workplace and compare the gender gap in incidence of performance pay and earnings and work effort under these contracts. Women are less likely to found in performance pay contracts but the gender gap is small. Furthermore, the effect of performance pay on earnings is modest and does not differ markedly by gender. Consequently the ability of these theories to explain the gender pay gap seems very limited.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0898.

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Date of creation: Nov 2008
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Handle: RePEc:cep:cepdps:dp0898

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: Gender Pay gap; Performance Pay;

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References

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  1. Alan Manning & Joanna Swaffield, 2008. "The gender gap in early-career wage growth," Economic Journal, Royal Economic Society, vol. 118(530), pages 983-1024, 07.
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Citations

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Cited by:
  1. M. Daniele Paserman & Stefano Gagliarducci, 2011. "Gender Interactions within Hierarchies: Evidence from the Political Arena," Boston University - Department of Economics - Working Papers Series WP2011-048, Boston University - Department of Economics.
  2. Gautam Bose & Kevin Lang, 2011. "A Theory of Monitoring and Internal Labor Markets," Discussion Papers 2012-06, School of Economics, The University of New South Wales.
  3. Paserman, Marco Daniele, 2007. "Gender Differences in Performance in Competitive Environments: Evidence from Professional Tennis Players," CEPR Discussion Papers 6335, C.E.P.R. Discussion Papers.
  4. Dreber, Anna & von Essen, Emma & Ranehill, Eva, 2011. "In Bloom: Gender Differences in Preferences among Adolescents," Working Paper Series in Economics and Finance 734, Stockholm School of Economics, revised 27 Jun 2012.
  5. Frick, Bernd, 2011. "Gender differences in competitiveness: Empirical evidence from professional distance running," Labour Economics, Elsevier, vol. 18(3), pages 389-398, June.
  6. Maria De Paola & Vincenzo Scoppa, 2011. "Gender Discrimination and Evaluators’ Gender: Evidence from the Italian Academy," Working Papers 201106, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).
  7. Dreber, Anna & von Essen, Emma & Ranehill, Eva, 2011. "Gender and Competition in Adolescence: Task Matter," Research Papers in Economics 2011:14, Stockholm University, Department of Economics, revised 08 Mar 2013.
  8. Bertrand, Marianne, 2011. "New Perspectives on Gender," Handbook of Labor Economics, Elsevier.
  9. Sara de la Rica & Juan J. Dolado & Raquel Vegas, 2013. "Gender Gaps in Performance Pay: New Evidence from Spain," Working Papers 2013-14, FEDEA.
  10. Ghazala Azmat & Barbara Petrongolo, 2014. "Gender and the Labor Market: What Have We Learned from Field and Lab Experiments?," CEP Occasional Papers 40, Centre for Economic Performance, LSE.

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