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

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  • Paarsch, Harry J.
  • Shearer, Bruce S.

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 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.

Suggested Citation

  • Paarsch, Harry J. & Shearer, Bruce S., 2004. "Male-Female Productivity Differentials: the Role of Ability and Incentives," Cahiers de recherche 0401, Université Laval - Département d'économique.
    • Handle: RePEc:lvl:laeccr:0401
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    References listed on IDEAS

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    1. 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.
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    7. 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.
    8. 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).
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    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.
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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.

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    More about this item

    Keywords

    Productivity; Gender; Compensation; Incentives;
    All these keywords.

    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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