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The gender wage gap – due to differences in efficiency wage effects or discrimination?

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  • Schwieren,Christiane

    (METEOR)

Abstract

Women often receive lower wages than men for comparable work. Many explanations are offered for this fact, ranging from women’s lower negotiation skills to discrimination by employers. In this paper, an experiment, which was originally conceptualized to test efficiency-wage theory, has been applied to test whether women get paid less than men in an experimental market, and if this is the case, why. The experiment is a variant of Fehr & Falk’s (1999) double auction with effort. Results are striking: Female workers receive significantly lower wages than male workers, no matter whether men or women are in the role of the firm. However, this does not pay for the firms, as women’s reactions to low wages are equal to those of men: low effort. More specifically, a high discrepancy between the wage asked by a worker and the wage offered by the firm leads to low effort. Extrapolating from the experiment to the “real†labor market, the results are pointing towards a vicious cycle: Women are offered lower wages than they expect, and consequentially they exhibit low effort levels. Therefore, employers who do not realize that women – just like men – reciprocate might regard their productivity as lower.

Suggested Citation

  • Schwieren,Christiane, 2003. "The gender wage gap – due to differences in efficiency wage effects or discrimination?," Research Memorandum 046, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  • Handle: RePEc:unm:umamet:2003046
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    References listed on IDEAS

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    1. Francine D. Blau & Marianne A. Ferber, 1991. "Career Plans and Expectations of Young Women and Men: The Earnings Gap and Labor Force Participation," Journal of Human Resources, University of Wisconsin Press, vol. 26(4), pages 581-607.
    2. Ernst Fehr & Armin Falk, 1999. "Wage Rigidity in a Competitive Incomplete Contract Market," Journal of Political Economy, University of Chicago Press, vol. 107(1), pages 106-134, February.
    3. Christoph Meng, 2002. "(Fe)male jobs and (fe)male wages: disentangling the effect of personal and job characteristics on wages by measuring stereotypes," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 45(2), pages 143-167.
    4. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 75-99, Fall.
    5. Viscusi, W Kip, 1980. "Sex Differences in Worker Quitting," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 388-398, August.
    6. Lawrence F. Katz, 1986. "Efficiency Wage Theories: A Partial Evaluation," NBER Chapters,in: NBER Macroeconomics Annual 1986, Volume 1, pages 235-290 National Bureau of Economic Research, Inc.
    7. Light, Audrey & Ureta, Manuelita, 1992. "Panel Estimates of Male and Female Job Turnover Behavior: Can Female Nonquitters Be Identified?," Journal of Labor Economics, University of Chicago Press, vol. 10(2), pages 156-181, April.
    8. Haagsma, Rein, 1993. "Is statistical discrimination socially efficient?," Information Economics and Policy, Elsevier, vol. 5(1), pages 31-50, January.
    9. Walters, Amy E. & Stuhlmacher, Alice F. & Meyer, Lia L., 1998. "Gender and Negotiator Competitiveness: A Meta-analysis," Organizational Behavior and Human Decision Processes, Elsevier, vol. 76(1), pages 1-29, October.
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    Cited by:

    1. Schwieren, Christiane & Sutter, Matthias, 2008. "Trust in cooperation or ability? An experimental study on gender differences," Economics Letters, Elsevier, vol. 99(3), pages 494-497, June.
    2. Schwieren, Christiane, 2012. "The gender wage gap in experimental labor markets," Economics Letters, Elsevier, vol. 117(3), pages 592-595.
    3. Jellal, Mohamed, 2014. "Social psychology and gender efficiency wage gap," MPRA Paper 57884, University Library of Munich, Germany.

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    Keywords

    labour economics ;

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