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Performance Pay and the Gender Wage Gap: Evidence from Spain

  • de la Rica, Sara
  • Dolado, Juan J.
  • Vegas, Raquel

This paper uses detailed information from a large wage survey in 2006 to analyze the gender wage gap in the performance-pay (PP) component of total hourly wages and its contribution to the overall gender gap in Spain. Under the assumption that PP is determined in a more competitive fashion than the other wage components, one would expect, in principle, to find a low gender gap in PP. However, this is not what we find. After controlling for observable differences in individual and job characteristics as well as for non random selection, the adjusted gender gap in PP reaches 26 log points, displaying a "glass ceiling" pattern. After examining several alternative theories that could rationalize these findings, we conjecture that monopsonistic features, possibly related to women´s lower labour mobility due to housework, fit better with our results than other theories related to occupational segregation.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7936.

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Date of creation: Jul 2010
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Handle: RePEc:cpr:ceprdp:7936
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  1. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-44, September.
  2. de la Rica, Sara & Dolado, Juan J. & García-Peñalosa, Cecilia, 2008. "On Gender Gaps and Self-fulfilling Expectations: Theory, Policies and Some Empirical Evidence," IZA Discussion Papers 3553, Institute for the Study of Labor (IZA).
  3. Javier Gardeazabal & Aratza Ugidos, . "More on identification in detailed wage decompositions," Studies on the Spanish Economy 140, FEDEA.
  4. Amuedo-Dorantes Catalina & De la Rica Sara, 2006. "The Role of Segregation and Pay Structure on the Gender Wage Gap: Evidence from Matched Employer-Employee Data for Spain," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-34, April.
  5. Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-88, August.
  6. Ewing, Bradley T., 1996. "Wages and performance-based pay: Evidence from the NLSY," Economics Letters, Elsevier, vol. 51(2), pages 241-246, May.
  7. Sara Rica & Juan Dolado & Vanesa Llorens, 2008. "Ceilings or floors? Gender wage gaps by education in Spain," Journal of Population Economics, Springer, vol. 21(3), pages 751-776, July.
  8. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, vol. 64(4), pages 957-79, July.
  9. Marianne Bertrand & Kevin F. Hallock, 2000. "The Gender Gap in Top Corporate Jobs," NBER Working Papers 7931, National Bureau of Economic Research, Inc.
  10. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2003. "A sticky floors model of promotion, pay, and gender," European Economic Review, Elsevier, vol. 47(2), pages 295-322, April.
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