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Gender Differences in Reservation Wages in Search Experiments

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  • Andrew McGee

    (University of Alberta, Department of Economics)

  • Peter McGee

    (University of Arkansas)

Abstract

Women report setting lower reservation wages than men in survey data. We show that women set reservation wages that are 14 to 18 percent lower than men’s in laboratory search experiments that control for factors not fully observed in surveys such as offer distributions and outside options. This gender gap — which exists even controlling for overconfidence, preferences, personality, and intelligence — leads women to spend less time searching than men while accepting lower wages. Women — but not men — set reservation wages that are too low relative to theoretically optimal values given their risk preferences early in search, reducing their earnings.

Suggested Citation

  • Andrew McGee & Peter McGee, 2023. "Gender Differences in Reservation Wages in Search Experiments," Working Papers 2023-11, University of Alberta, Department of Economics.
    • Handle: RePEc:ris:albaec:2023_011
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    2. Bonaccolto-Töpfer, Marina & Satlukal, Sascha, 2024. "Gender differences in reservation wages: New evidence for Germany," Labour Economics, Elsevier, vol. 91(C).

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    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
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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