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Male-Female Productivity Differentials: The Role of Ability and Incentives

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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. Nous étudions la réaction aux incitations pour expliquer les différences de productivité dans une entreprise qui paie ses travailleurs à la pièce. Nous développons un modèle dans lequel les différentiels de productivité peuvent être divisés en deux parties : une partie liée aux différences d'habilité et une autre aux différences quant aux réponses aux incitations. Nous appliquons cette distinction aux travailleurs (hommes et femmes) d'une entreprise de plantation d'arbres située en Colombie-Britannique. Nos résultats montrent que les individus sont hétérogènes quant à leur réponse aux incitations. Pourtant, bien que les femmes y réagissent sensiblement plus que les hommes, cette différence n'est pas statistiquement significative. Le différentiel de productivité apparaît seulement à cause des différences d'habilité, celle-ci étant représentée, dans notre étude, par la force physique.

Suggested Citation

  • Harry J. Paarsch & Bruce S. Shearer, 2004. "Male-Female Productivity Differentials: The Role of Ability and Incentives," CIRANO Working Papers 2004s-17, CIRANO.
  • Handle: RePEc:cir:cirwor:2004s-17
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    References listed on IDEAS

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    1. Uri Gneezy & Muriel Niederle & Aldo Rustichini, 2003. "Performance in Competitive Environments: Gender Differences," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 1049-1074.
    2. Angrist, Joshua D. & Krueger, Alan B., 1999. "Empirical strategies in labor economics," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 23, pages 1277-1366 Elsevier.
    3. Bowlus, Audra J, 1997. "A Search Interpretation of Male-Female Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 625-657, October.
    4. James G. MacKinnon, 2002. "Bootstrap inference in econometrics," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 615-645, November.
    5. 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.
    6. Gunderson, Morley, 1989. "Male-Female Wage Differentials and Policy Responses," Journal of Economic Literature, American Economic Association, vol. 27(1), pages 46-72, March.
    7. 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 33-58, January.
    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.
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    Cited by:

    1. Dubois, Pierre & Vukina, Tomislav, 2009. "Optimal incentives under moral hazard and heterogeneous agents: Evidence from production contracts data," International Journal of Industrial Organization, Elsevier, vol. 27(4), pages 489-500, July.

    More about this item

    Keywords

    Productivity; gender; compensation; incentives; productivité; genre; rémunération; incitations;

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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