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Understanding the Gender Pay Gap: What's Competition Got to Do with It?

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Listed:
  • Alan Manning
  • Farzad Saidi

Abstract

A number of papers have recently argued that men and women have different attitudes and behavioural responses to competition. Laboratory experiments suggest that these gender differences are very large but it is important to be able to map these findings into real world differences. In this paper, we use performance pay as an indicator of competition in the workplace and compare the gender gap in incidence of performance pay and earnings and work effort under these contracts. Women are less likely to found in performance pay contracts but the gender gap is small. Furthermore, the effect of performance pay on earnings is modest and does not differ markedly by gender. Consequently the ability of these theories to explain the gender pay gap seems very limited.

Suggested Citation

  • Alan Manning & Farzad Saidi, 2008. "Understanding the Gender Pay Gap: What's Competition Got to Do with It?," CEP Discussion Papers dp0898, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp0898
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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