Gender Differences in Motivational Crowding Out of Work Performance

Abstract

This paper shows that prior financial incentives induce a crowding out effect when incentives are discontinued. In our real-effort experiment workers receive a piece rate before monetary incentives are substituted by a one-time payment. In this case, workers' performance significantly drops when receiving the one-time payment. The effect is driven by a fraction of men who reduce effort substantially, whereas women constantly perform well. We find that this motivational crowding-out effect disappears when men do not have prior experience of a piece rate. In a series of control treatments, we discard several alternative explanations besides from motivational crowding out.

Keywords: Gender Differences, Incentives, Motivational Crowding Out, Real-Effort Task

JEL Classification: C91, J16, M54