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Understanding the gender pay gap: what's competition got to do with it?

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  • Manning, Alan
  • Saidi, Farzad

Abstract

A number of papers have recently argued that men and women have different attitudes and behavioural responses to competition. Laboratory experiments suggest that these gender differences are very large but it is important to be able to map these findings into real world differences. In this paper, we use performance pay as an indicator of competition in the workplace and compare the gender gap in incidence of performance pay and earnings and work effort under these contracts. Women are less likely to found in performance pay contracts but the gender gap is small. Furthermore, the effect of performance pay on earnings is modest and does not differ markedly by gender. Consequently the ability of these theories to explain the gender pay gap seems very limited.

Suggested Citation

  • Manning, Alan & Saidi, Farzad, 2008. "Understanding the gender pay gap: what's competition got to do with it?," LSE Research Online Documents on Economics 28510, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:28510
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Gender pay gap; Performance pay;

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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