Do Women Respond Less to Performance Pay? Building Evidence from Multiple Experiments
American Economic Review: Insights
vol. 3,
no. 4, December 2021
(pp. 435-54)
Abstract
Existing empirical work raises the hypothesis that performance pay—whatever its output gains—may widen the gender earnings gap because women may respond less to incentives. We evaluate this possibility by aggregating evidence from existing experiments on performance incentives with male and female subjects. Using a Bayesian hierarchical model, we estimate both the average effect and heterogeneity across studies. We find that the gender response difference is close to zero and heterogeneity across studies is small, while performance pay increases output by 0.36 standard deviations on average. The data thus support agency theory for men and women alike.Citation
Bandiera, Oriana, Greg Fischer, Andrea Prat, and Erina Ytsma. 2021. "Do Women Respond Less to Performance Pay? Building Evidence from Multiple Experiments." American Economic Review: Insights, 3 (4): 435-54. DOI: 10.1257/aeri.20200466Additional Materials
JEL Classification
- C11 Bayesian Analysis: General
- C90 Design of Experiments: General
- J16 Economics of Gender; Non-labor Discrimination
- J31 Wage Level and Structure; Wage Differentials
- J33 Compensation Packages; Payment Methods