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Overconfidence and Gender Differences in Wage Expectations

Author

Listed:
  • Briel, Stephanie

    (University of Hohenheim)

  • Osikominu, Aderonke

    (University of Hohenheim)

  • Pfeifer, Gregor

    (University of Sydney)

  • Reutter, Mirjam

    (European University Institute)

  • Satlukal, Sascha

    (University of Hohenheim)

Abstract

We analyze the impact of (over-)confidence on gender differences in expected starting salaries using elicited beliefs of prospective university students in Germany. According to our results, female students have lower wage expectations and are less overconfident than their male counterparts. Oaxaca-Blinder decompositions of the mean show that 7.7% of the gender gap in wage expectations is attributable to a higher overconfidence of males. Decompositions of the unconditional quantiles of expected salaries suggest that the contribution of gender differences in confidence to the gender gap is particularly strong at the bottom and top of the wage expectation distribution.

Suggested Citation

  • Briel, Stephanie & Osikominu, Aderonke & Pfeifer, Gregor & Reutter, Mirjam & Satlukal, Sascha, 2020. "Overconfidence and Gender Differences in Wage Expectations," IZA Discussion Papers 13517, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13517
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    References listed on IDEAS

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    2. Adamecz-Völgyi, Anna & Shure, Nikki, 2022. "The gender gap in top jobs – The role of overconfidence," Labour Economics, Elsevier, vol. 79(C).
    3. Ana Fernandes & Martin Huber & Giannina Vaccaro, 2021. "Gender differences in wage expectations," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-24, June.

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    More about this item

    Keywords

    gender pay gap; wage expectations; overconfidence; decomposition analyses; unconditional quantile regressions (RIF-Regressions);
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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