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Performance Pay and the Gender Wage Gap: Evidence from Spain

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Author Info

  • de la Rica, Sara

    ()
    (University of the Basque Country)

  • Dolado, Juan J.

    ()
    (Universidad Carlos III de Madrid)

  • Vegas, Raquel

    ()
    (FEDEA, Madrid)

Abstract

This paper uses detailed information from a large wage survey in 2006 to analyze the gender wage gap in the performance-pay (PP) component of total hourly wages and its contribution to the overall gender gap in Spain. Under the assumption that PP is determined in a more competitive fashion than the other wage components, one would expect, in principle, to find a low gender gap in PP. However, this is not what we find. After controlling for observable differences in individual and job characteristics as well as for non random selection, the adjusted gender gap in PP reaches 26 log points, displaying a "glass ceiling" pattern. After examining several alternative theories that could rationalize these findings, we conjecture that monopsonistic features, possibly related to women's lower labour mobility due to housework, fit better with our results than other theories related to occupational segregation.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5032.

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Length: 40 pages
Date of creation: Jun 2010
Date of revision:
Publication status: Forthcoming in: Annals of Economics and Statistics, 2014
Handle: RePEc:iza:izadps:dp5032

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Keywords: quantile regressions; selection bias; gender gaps; performance pay;

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References

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  1. Ewing, Bradley T., 1996. "Wages and performance-based pay: Evidence from the NLSY," Economics Letters, Elsevier, vol. 51(2), pages 241-246, May.
  2. Marianne Bertrand & Kevin F. Hallock, 2000. "The Gender Gap in Top Corporate Jobs," NBER Working Papers 7931, National Bureau of Economic Research, Inc.
  3. Javier Gardeazabal & Arantza Ugidos, 2004. "More on Identification in Detailed Wage Decompositions," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 1034-1036, November.
  4. de la Rica, Sara & Dolado, Juan J. & García-Peñalosa, Cecilia, 2008. "On Gender Gaps and Self-fulfilling Expectations: Theory, Policies and Some Empirical Evidence," CEPR Discussion Papers 6883, C.E.P.R. Discussion Papers.
  5. Amuedo-Dorantes Catalina & De la Rica Sara, 2006. "The Role of Segregation and Pay Structure on the Gender Wage Gap: Evidence from Matched Employer-Employee Data for Spain," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-34, April.
  6. Dinardo, J. & Fortin, N.M. & Lemieux, T., 1994. "Labor Market Institutions and the Distribution of Wages, 1973-1992: a Semiparametric Approach," Cahiers de recherche 9406, Universite de Montreal, Departement de sciences economiques.
  7. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2003. "A sticky floors model of promotion, pay, and gender," European Economic Review, Elsevier, vol. 47(2), pages 295-322, April.
  8. Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-88, August.
  9. Sara Rica & Juan Dolado & Vanesa Llorens, 2008. "Ceilings or floors? Gender wage gaps by education in Spain," Journal of Population Economics, Springer, vol. 21(3), pages 777-778, July.
  10. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, vol. 64(4), pages 957-79, July.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Buenas y malas prácticas en la negociación colectiva
    by Florentino Felgueroso in Nada Es Gratis on 2011-03-16 08:13:54
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Cited by:
  1. Ghazala Azmat & Rosa Ferrer Zarzuela, 2012. "Gender gaps in performance: Evidence from young lawyers," Economics Working Papers 1300, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2012.
  2. Matano, Alessia & Naticchioni, Paolo, 2012. "Rent Sharing as a Driver of the Glass Ceiling Effect," IZA Discussion Papers 6875, Institute for the Study of Labor (IZA).
  3. Thisse, Jacques-François & Toulemonde, Eric, 2010. "The Distribution of Earnings under Monopsonistic/polistic Competition," CEPR Discussion Papers 7981, C.E.P.R. Discussion Papers.
  4. Katrin Sommerfeld, 2012. "Higher and Higher?: Performance Pay and Wage Inequality in Germany," SOEPpapers on Multidisciplinary Panel Data Research 476, DIW Berlin, The German Socio-Economic Panel (SOEP).
  5. Kangasniemi, Mari & Kauhanen, Antti, 2011. "Performance-related pay and gender wage differences," Discussion Papers 1249, The Research Institute of the Finnish Economy.

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