IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp16577.html
   My bibliography  Save this paper

Gender Differences in Reservation Wages in Search Experiments

Author

Listed:
  • McGee, Andrew

    (University of Alberta)

  • McGee, Peter

    (University of Arkansas, Fayetteville)

Abstract

Women report setting lower reservation wages than men in survey data. We show that women set reservation wages that are 14 to 18 percent lower than men's in laboratory search experiments that control for factors not fully observed in surveys such as offer distributions and outside options. This gender gap—which exists even controlling for overconfidence, preferences, personality, and intelligence—leads women to spend less time searching than men while accepting lower wages. Women—but not men—set reservation wages that are too low relative to theoretically optimal values given their risk preferences early in search, reducing their earnings.

Suggested Citation

  • McGee, Andrew & McGee, Peter, 2023. "Gender Differences in Reservation Wages in Search Experiments," IZA Discussion Papers 16577, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16577
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp16577.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stefan Eriksson & Jonas Lagerström, 2012. "The Labor Market Consequences of Gender Differences in Job Search," Journal of Labor Research, Springer, vol. 33(3), pages 303-327, September.
    2. Thomas Le Barbanchon & Roland Rathelot & Alexandra Roulet, 2021. "Gender Differences in Job Search: Trading off Commute against Wage," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(1), pages 381-426.
    3. Christine L. Exley & Muriel Niederle & Lise Vesterlund, 2020. "Knowing When to Ask: The Cost of Leaning In," Journal of Political Economy, University of Chicago Press, vol. 128(3), pages 816-854.
    4. David Card & Ana Rute Cardoso & Patrick Kline, 2016. "Bargaining, Sorting, and the Gender Wage Gap: Quantifying the Impact of Firms on the Relative Pay of Women," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 633-686.
    5. Isabelle Sin & Steven Stillman & Richard Fabling, 2022. "What Drives the Gender Wage Gap? Examining the Roles of Sorting, Productivity Differences, Bargaining, and Discrimination," The Review of Economics and Statistics, MIT Press, vol. 104(4), pages 636-651, October.
    6. Caliendo, Marco & Lee, Wang-Sheng & Mahlstedt, Robert, 2017. "The gender wage gap and the role of reservation wages: New evidence for unemployed workers," Journal of Economic Behavior & Organization, Elsevier, vol. 136(C), pages 161-173.
    7. Alan B. Krueger & Andreas I. Mueller, 2016. "A Contribution to the Empirics of Reservation Wages," American Economic Journal: Economic Policy, American Economic Association, vol. 8(1), pages 142-179, February.
    8. Brown, Sarah & Roberts, Jennifer & Taylor, Karl, 2011. "The gender reservation wage gap: Evidence from British Panel data," Economics Letters, Elsevier, vol. 113(1), pages 88-91, October.
    9. Pedro Bordalo & Katherine Coffman & Nicola Gennaioli & Andrei Shleifer, 2019. "Beliefs about Gender," American Economic Review, American Economic Association, vol. 109(3), pages 739-773, March.
    10. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 1067-1101.
    11. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    12. Armin Falk & Anke Becker & Thomas Dohmen & David Huffman & Uwe Sunde, 2023. "The Preference Survey Module: A Validated Instrument for Measuring Risk, Time, and Social Preferences," Management Science, INFORMS, vol. 69(4), pages 1935-1950, April.
    13. Meta Brown & Christopher J. Flinn & Andrew Schotter, 2011. "Real-Time Search in the Laboratory and the Market," American Economic Review, American Economic Association, vol. 101(2), pages 948-974, April.
    14. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    15. Steffen Andersen & Seda Ertac & Uri Gneezy & John A. List & Sandra Maximiano, 2018. "On the cultural basis of gender differences in negotiation," Experimental Economics, Springer;Economic Science Association, vol. 21(4), pages 757-778, December.
    16. Cox, James C & Oaxaca, Ronald L, 1989. "Laboratory Experiments with a Finite-Horizon Job-Search Model," Journal of Risk and Uncertainty, Springer, vol. 2(3), pages 301-329, September.
    17. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David B. Huffman & Uwe Sunde, 2017. "Global Evidence on Economic Preferences," NBER Working Papers 23943, National Bureau of Economic Research, Inc.
    18. McGee, Andrew & McGee, Peter, 2016. "Search, effort, and locus of control," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 89-101.
    19. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David Huffman & Uwe Sunde, 2018. "Global Evidence on Economic Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(4), pages 1645-1692.
    20. Schotter, Andrew & Braunstein, Yale M, 1981. "Economic Search: An Experimental Study," Economic Inquiry, Western Economic Association International, vol. 19(1), pages 1-25, January.
    21. Bilal Muhammad Khan & Muhammad Farhan Majid, 2020. "A note on the gender reservation wage gap in developing countries," Scottish Journal of Political Economy, Scottish Economic Society, vol. 67(5), pages 462-468, November.
    22. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    23. Cox, James C & Oaxaca, Ronald L, 1992. "Direct Tests of the Reservation Wage Property," Economic Journal, Royal Economic Society, vol. 102(415), pages 1423-1432, November.
    24. Haeckl, Simone, 2022. "Image concerns in ex-ante self-assessments–Gender differences and behavioral consequences," Labour Economics, Elsevier, vol. 76(C).
    25. Brad M. Barber & Terrance Odean, 2001. "Boys will be Boys: Gender, Overconfidence, and Common Stock Investment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 261-292.
    26. Shane Frederick, 2005. "Cognitive Reflection and Decision Making," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 25-42, Fall.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ulf Rinne & Hendrik Sonnabend, 2022. "Female workers, male managers: Gender, leadership, and risk‐taking," Southern Economic Journal, John Wiley & Sons, vol. 88(3), pages 906-930, January.
    2. Kesternich, Iris & Schumacher, Heiner & Siflinger, Bettina & Valder, Franziska, 2022. "Reservation wages and labor supply," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 583-607.
    3. Eber, Nicolas & François, Abel & Weill, Laurent, 2021. "Gender, age, and attitude toward competition," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 668-690.
    4. Kinnl, Klara & Möller, Jakob & Walter, Anna, 2023. "Borrowed Plumes:," Department of Economics Working Paper Series 345, WU Vienna University of Economics and Business.
    5. McGee, Andrew & McGee, Peter, 2016. "Search, effort, and locus of control," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 89-101.
    6. Eva Ranehill & Roberto A. Weber, 2022. "Gender preference gaps and voting for redistribution," Experimental Economics, Springer;Economic Science Association, vol. 25(3), pages 845-875, June.
    7. Nicolas Jacquemet & Olivier L’Haridon & Isabelle Vialle, 2014. "Marché du travail, évaluation et économie expérimentale," Revue française d'économie, Presses de Sciences-Po, vol. 0(1), pages 189-226.
    8. Fallucchi, Francesco & Nosenzo, Daniele & Reuben, Ernesto, 2020. "Measuring preferences for competition with experimentally-validated survey questions," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 402-423.
    9. Klara Kinnl & Jakob Möller & Anna Walter, 2023. "The Gender Gap in Claiming Credit for Teamwork," Department of Economics Working Papers wuwp345, Vienna University of Economics and Business, Department of Economics.
    10. Horn, Dániel & Kiss, Hubert Janos & Lénárd, Tünde, 2020. "Economic preferences in the classroom - research documentation," MPRA Paper 100815, University Library of Munich, Germany.
    11. Horn, Dániel & Kiss, Hubert János & Lénárd, Tünde, 2022. "Gender differences in preferences of adolescents: Evidence from a large-scale classroom experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 478-522.
    12. Nicolas Jacquemet & Olivier L’Haridon & Isabelle Vialle, 2014. "Marché du travail, évaluation et économie expérimentale," Revue française d'économie, Presses de Sciences-Po, vol. 0(1), pages 189-226.
    13. Kinnl, Klara & Möller, Jakob & Walter, Anna, 2023. "Borrowed Plumes: The Gender Gap in Claiming Credit for Teamwork," Department for Strategy and Innovation Working Paper Series 01/2023, WU Vienna University of Economics and Business.
    14. Fu, Jingcheng & Sefton, Martin & Upward, Richard, 2019. "Social comparisons in job search," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 338-361.
    15. Carvajal, Daniel & Franco, Catalina & Isaksson, Siri, 2024. "Will Artificial Intelligence Get in the Way of Achieving Gender Equality?," Discussion Paper Series in Economics 3/2024, Norwegian School of Economics, Department of Economics.
    16. Zakaria Babutsidze & Nobuyuki Hanaki & Adam Zylbersztejn, 2021. "Nonverbal content and trust: An experiment on digital communication," Economic Inquiry, Western Economic Association International, vol. 59(4), pages 1517-1532, October.
    17. Justus Haucap & Christina Heldman & Holger A. Rau, 2022. "Gender and Cooperation in the Presence of Negative Externalities," CESifo Working Paper Series 9614, CESifo.
    18. Pablo Brañas-Garza & Diego Jorrat & Antonio M. Espín & Angel Sánchez, 2023. "Paid and hypothetical time preferences are the same: lab, field and online evidence," Experimental Economics, Springer;Economic Science Association, vol. 26(2), pages 412-434, April.
    19. Dato, Simon & Nieken, Petra, 2014. "Gender differences in competition and sabotage," Journal of Economic Behavior & Organization, Elsevier, vol. 100(C), pages 64-80.
    20. Felix Holzmeister & Martin Holmén & Michael Kirchler & Matthias Stefan & Erik Wengström, 2023. "Delegation Decisions in Finance," Management Science, INFORMS, vol. 69(8), pages 4828-4844, August.

    More about this item

    Keywords

    reservation wages; gender wage gaps; search experiments;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp16577. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.