Research

Abstract

This study examines whether the female earnings gap results from gender differences in preferences for competition and confidence. We use laboratory experiments on college seniors to measure tastes for competition and confidence and then track these subjects’ labor market experiences in the early years after college. Women's compensation is positively correlated with preferences for competition coupled with confidence while men's compensation is not. Women who exhibit a taste to compete and are confident about their performance earn substantially more than other women and do not earn less than men. Further, enjoying competition or being confident alone is insufficient to raise compensation. Half of this female earnings’ effect is explained by college major and labor market controls, but even controlling for these characteristics, a higher taste for competition for the most confident women results in more than a 7% increase in compensation.