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

Summary

Manning and Saidi's 2010 research paper, "Understanding the Gender Pay Gap: What's Competition Got to Do with It?", critically examines the proposition that differing attitudes and behavioral responses to competition between men and women contribute significantly to the gender pay gap. This premise stems from laboratory experiments suggesting substantial gender differences in competitive behavior, with women reportedly more likely to avoid jobs with performance-based remuneration and to underperform in competitive scenarios. To evaluate these hypotheses in a real-world context, the authors employ performance pay as a practical indicator of workplace competition. Their methodology involves a comprehensive comparison of the gender gap across several dimensions: the likelihood of being under performance pay contracts, the earnings derived from such contracts, and the work effort exerted under these arrangements. The study's findings reveal that while women are indeed less likely than men to be employed under performance pay contracts, this gender gap in incidence is notably small. Furthermore, the analysis indicates that the impact of performance pay on earnings is modest and, critically, does not exhibit a significant difference between genders. Consequently, the authors conclude that the ability of competition-based hypotheses, particularly those focusing on performance pay, to explain a substantial portion of the gender pay gap is very limited. The research suggests that factors other than direct competition via performance pay are more influential in perpetuating wage disparities between men and women. This challenges the notion that individual choices or inherent gender differences in competitive drive are primary drivers of the pay gap, instead pointing towards a need to explore alternative explanations.