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Male-Female Productivity Differentials: the Role of Ability and Incentives (revised)

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  • Harry J. Paarsch
  • Bruce S. Shearer

Abstract

We consider the response to incentives as an explanation for productivity differences within a firm that paid its workers piece rates. We provide a framework within which observed productivity differences can be decomposed into two parts: one due to differences in ability and the other due to differences in the response to incentives. We apply this decomposition to male and female workers from a tree-planting firm in the province of British Columbia, Canada. We provide evidence that individuals do react differently to incentives. However, while the women in our sample reacted slightly more to incentives than did the men, the average difference is not statistically significant. The productivity differential that men enjoyed arose because of differences in ability, strength in our application.

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File URL: http://www.cirpee.org/fileadmin/documents/Cahiers_2004/CIRPEE04-10.pdf
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Bibliographic Info

Paper provided by CIRPEE in its series Cahiers de recherche with number 0410.

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Date of creation: 2004
Date of revision:
Handle: RePEc:lvl:lacicr:0410

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Keywords: Productivity; Gender; Compensation; Incentives;

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  1. Joshua Angrist & Alan Krueger, 1998. "Empirical Strategies in Labor Economics," Working Papers 780, Princeton University, Department of Economics, Industrial Relations Section..
  2. Bowlus, Audra J, 1997. "A Search Interpretation of Male-Female Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 625-57, October.
  3. Gunderson, Morley, 1975. "Male-Female Wage Differentials and the Impact of Equal Pay Legislation," The Review of Economics and Statistics, MIT Press, vol. 57(4), pages 462-69, November.
  4. James E. Long, 1995. "The effects of tastes and motivation on individual income," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(2), pages 338-351, January.
  5. Gunderson, Morley, 1989. "Male-Female Wage Differentials and Policy Responses," Journal of Economic Literature, American Economic Association, vol. 27(1), pages 46-72, March.
  6. M. Ryan Haley, 2003. "The Response of Worker Effort to Piece Rates: Evidence from the Midwest Logging Industry," Journal of Human Resources, University of Wisconsin Press, vol. 38(4).
  7. James G. MacKinnon, 2002. "Bootstrap inference in econometrics," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 615-645, November.
  8. Bruce Shearer, 1996. "Piece-Rates, Principal-Agent Models, and Productivity Profiles: Parametric and Semi-Parametric Evidence from Payroll Records," Journal of Human Resources, University of Wisconsin Press, vol. 31(2), pages 275-303.
  9. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  10. Bull, Clive & Schotter, Andrew & Weigelt, Keith, 1987. "Tournaments and Piece Rates: An Experimental Study," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 1-33, February.
  11. Becker, Gary S, 1985. "Human Capital, Effort, and the Sexual Division of Labor," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages S33-58, January.
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