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Performance Pay, Competitiveness, and the Gender Wage Gap: Evidence from the United States

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Listed:
  • McGee, Andrew

    (University of Alberta)

  • McGee, Peter

    (National University of Singapore)

  • Pan, Jessica

    (National University of Singapore)

Abstract

Evidence that women are less likely to opt into competitive compensation schemes in the laboratory has generated speculation that a gender difference in competitiveness contributes to the gender wage gap. Using data from the NLSY79 and NLSY97, we show that women are less likely to be employed in jobs using competitive compensation. The portion of the gender wage gap explained by gender segregation in compensation schemes is small in the NLSY79 but somewhat larger in the NLSY97 – suggesting an increasing role for competitiveness in explaining the gender wage gap.

Suggested Citation

  • McGee, Andrew & McGee, Peter & Pan, Jessica, 2014. "Performance Pay, Competitiveness, and the Gender Wage Gap: Evidence from the United States," IZA Discussion Papers 8563, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8563
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    References listed on IDEAS

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    1. Thomas Lemieux & W. Bentley MacLeod & Daniel Parent, 2009. "Performance Pay and Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 1-49.
    2. Alan Manning & Farzad Saidi, 2010. "Understanding the Gender Pay Gap: What's Competition Got to Do with it?," ILR Review, Cornell University, ILR School, vol. 63(4), pages 681-698, July.
    3. 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.
    4. Marie-Pierre Dargnies, 2012. "Men Too Sometimes Shy Away from Competition: The Case of Team Competition," Management Science, INFORMS, vol. 58(11), pages 1982-2000, November.
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    6. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    7. Marie-Pierre Dargnies, 2012. "Men Too Sometimes Shy Away from Competition : The Case of Team Competition," Post-Print hal-01492284, HAL.
    8. Claudia Goldin, 2014. "A Grand Gender Convergence: Its Last Chapter," American Economic Review, American Economic Association, vol. 104(4), pages 1091-1119, April.
    9. Uri Gneezy & Muriel Niederle & Aldo Rustichini, 2003. "Performance in Competitive Environments: Gender Differences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 1049-1074.
    10. Kristin Kleinjans, 2008. "Do Gender Differences in Preferences for Competition Matter for Occupational Expectations?," Economics Working Papers 2008-09, Department of Economics and Business Economics, Aarhus University.
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    Cited by:

    1. Nicola Gagliardi & Benoît Mahy & François Rycx, 2019. "Does firms’ position in global value chains matter for workers’ wages?. An overview with a gender perspective," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(4), pages 55-62.
    2. Nicola Gagliardi & Benoît Mahy & François Rycx, 2021. "Upstreamness, Wages and Gender: Equal Benefits for All?," British Journal of Industrial Relations, London School of Economics, vol. 59(1), pages 52-83, March.
    3. Nguyen, Hieu, 2019. "How does alcohol access affect transitional adults’ healthy dietary behaviors?," Economics & Human Biology, Elsevier, vol. 35(C), pages 82-95.
    4. Joshua Hall & Amanda Ross & Jamie Bologna Pavlik, 2020. "Laissez-Faire Economic Policy in a World Where Gender Income Gaps Exist: Helping or Hurting?," Journal of Economics, Race, and Policy, Springer, vol. 3(2), pages 144-158, June.
    5. Balafoutas, Loukas & Sutter, Matthias, 2019. "How uncertainty and ambiguity in tournaments affect gender differences in competitive behavior," European Economic Review, Elsevier, vol. 118(C), pages 1-13.
    6. Boris Hirsch & Philipp Lentge, 2022. "Non‐base compensation and the gender pay gap," LABOUR, CEIS, vol. 36(3), pages 277-301, September.
    7. Balafoutas, Loukas & Davis, Brent J. & Sutter, Matthias, 2016. "Affirmative action or just discrimination? A study on the endogenous emergence of quotas," Journal of Economic Behavior & Organization, Elsevier, vol. 127(C), pages 87-98.
    8. Cortes, Patricia & Pan, Jessica, 2017. "Occupation and Gender," IZA Discussion Papers 10672, Institute of Labor Economics (IZA).
    9. Hirsch, Boris & Lentge, Philipp, 2021. "Non-Base Compensation and the Gender Pay Gap," IZA Discussion Papers 14551, Institute of Labor Economics (IZA).
    10. Jones, Melanie & Kaya, Ezgi, 2022. "Performance-related Pay and the UK Gender Pay Gap," GLO Discussion Paper Series 1211, Global Labor Organization (GLO).
    11. Boris Hirsch & Philipp Lentge, 2021. "Non-Base Compensation and the Gender Pay Gap," Working Paper Series in Economics 404, University of Lüneburg, Institute of Economics.
    12. Bredemeier, Christian, 2019. "Gender Gaps in Pay and Inter-Firm Mobility," IZA Discussion Papers 12785, Institute of Labor Economics (IZA).
    13. Collischon & Matthias, 2018. "Can Personality Traits Explain Glass Ceilings?," SOEPpapers on Multidisciplinary Panel Data Research 965, DIW Berlin, The German Socio-Economic Panel (SOEP).
    14. Kato, Takao & Kodama, Naomi, 2017. "Women in the Workplace and Management Practices: Theory and Evidence," IZA Discussion Papers 10788, Institute of Labor Economics (IZA).
    15. Fernandes, Mario & Hilber, Simon & Sturm, Jan-Egbert & Walter, Andreas, 2023. "Closing the gender gap in academia? Evidence from an affirmative action program," Research Policy, Elsevier, vol. 52(9).

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    More about this item

    Keywords

    gender wage gap; competitiveness; performance pay;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines

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