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How competitiveness may cause a gender wage gap: Experimental evidence

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  • Heinz, Matthias
  • Normann, Hans-Theo
  • Rau, Holger A.

Abstract

We show that choices in competitive behavior may entail a gender wage gap. In our experiments, employees first choose a remuneration scheme (competitive tournament vs. piece rate) and then conduct a real-effort task. Employers know the pie size the employee has generated, the remuneration scheme chosen, and the employee׳s gender. Employers then decide how the pie will be split, as in a dictator game. Whereas employers do not discriminate by gender when tournaments are chosen, they take substantially and significantly more from female employees who choose piece-rate remuneration. A discriminatory wage gap occurs which cannot be attributed to employees׳ performance.

Suggested Citation

  • Heinz, Matthias & Normann, Hans-Theo & Rau, Holger A., 2016. "How competitiveness may cause a gender wage gap: Experimental evidence," European Economic Review, Elsevier, vol. 90(C), pages 336-349.
    • Handle: RePEc:eee:eecrev:v:90:y:2016:i:c:p:336-349
    DOI: 10.1016/j.euroecorev.2016.02.011
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    6. Matthias Collischon, 2019. "Is There a Glass Ceiling over Germany?," German Economic Review, Verein für Socialpolitik, vol. 20(4), pages 329-359, November.
    7. Céline Bonnet & Jan Philip Schain, 2020. "An Empirical Analysis Of Mergers: Efficiency Gains And Impact On Consumer Prices," Journal of Competition Law and Economics, Oxford University Press, vol. 16(1), pages 1-35.
    8. Veronika Grimm & Holger A Rau & Simeon Schächtele, 2020. "Gender differences in multi-employee gift exchange with self-reported contributions," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-19, September.
    9. Jetter, Michael & Walker, Jay K., 2018. "The gender of opponents: Explaining gender differences in performance and risk-taking?," European Economic Review, Elsevier, vol. 109(C), pages 238-256.
    10. Bredemeier, Christian, 2019. "Gender Gaps in Pay and Inter-Firm Mobility," IZA Discussion Papers 12785, Institute of Labor Economics (IZA).
    11. Collischon & Matthias, 2018. "Can Personality Traits Explain Glass Ceilings?," SOEPpapers on Multidisciplinary Panel Data Research 965, DIW Berlin, The German Socio-Economic Panel (SOEP).
    12. Neyer, Ulrike & Stempel, Daniel, 2019. "Macroeconomic effects of gender discrimination," DICE Discussion Papers 324, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    13. Chen Liang & Yili Hong & Bin Gu & Jing Peng, 2018. "Gender Wage Gap in Online Gig Economy and Gender Differences in Job Preferences," Working Papers 18-03, NET Institute.
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    More about this item

    Keywords

    Dictator game; Discrimination; Gender wage gap; Laboratory experiment; Real-effort task;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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