Gender Gaps in Performance Pay: New Evidence from Spain

This paper analyzes the gender gap in the performance–pay component of hourly wages received by workers in Spain using detailed information drawn from a large wage survey for 2006. Under the assumption that performance pay is determined in a more competitive fashion than the remaining wage components, there should be less room for gender discrimination. However, this is not what we find. After controlling for observable characteristics, non-random selection into performance-pay jobs and for segregation into different firms and occupations, the estimated adjusted gap in favour of male remains large (around 30 log points). Further, there is evidence of a “glass ceiling” pattern throughout the distribution of performance pay. After examining alternative hypotheses that could rationalize these findings, we conjecture that employers’ discrimination, possibly due to monopsonistic power, might be the one which is more consistent with the evidence.