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How Competitiveness May Cause a Gender Wage Gap: Experimental Evidence

32 Pages Posted: 30 Apr 2014 Last revised: 15 Oct 2015

Matthias Heinz

University of Cologne - Department of Personnel Economics; Centre for Economic Policy Research (CEPR)

Hans-Theo Normann

Heinrich Heine University Dusseldorf - Department of Economics; Max Planck Institute for Research on Collective Goods

Holger Andreas Rau

University of Göttingen

Date Written: October 2015

Abstract

We show that choices in competitive behavior may entail a gender wage gap. In our experiments, employees first choose a remuneration scheme (competitive tournament vs. piece rate) and then conduct a real-effort task. Employers know the pie size the employee has generated, the remuneration scheme chosen, and the employee's gender. Employers then decide how the pie will be split, as in a dictator game. Whereas employers do not discriminate by gender when tournaments are chosen, they take substantially and significantly more from female employees who choose piece-rate remuneration. A discriminatory wage gap occurs which cannot be attributed to employees' performance.

Keywords: dictator game, discrimination, gender wage gap, laboratory experiment, real-effort task

JEL Classification: C91, J16, M52

Suggested Citation

Heinz, Matthias and Normann, Hans-Theo and Rau, Holger Andreas, How Competitiveness May Cause a Gender Wage Gap: Experimental Evidence (October 2015). Available at SSRN: https://ssrn.com/abstract=2430235 or http://dx.doi.org/10.2139/ssrn.2430235

Matthias Heinz

University of Cologne - Department of Personnel Economics ( email )

Cologne, 50923
Germany

Centre for Economic Policy Research (CEPR) ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Hans-Theo Normann (Contact Author)

Heinrich Heine University Dusseldorf - Department of Economics ( email )

Duesseldorf
Germany

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Holger Andreas Rau

University of Göttingen ( email )

Platz der Göttinger Sieben 3
Göttingen, Niedersachsen 37073
Germany

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