Narrator: In 2014, female full-time workers made only 79 cents for every dollar earned by men, a gender wage gap of 21 percent. Women still earn less than men in almost every occupation.
At the top of the corporate ladder, the wage gap only becomes more obvious. Women represent only 6.5 percent of the best-paid chief executives, and even those women earn nearly 10 percent less than their male counterparts.
One possibility that doesn’t get a lot of attention is that men and women may feel differently about competition. The difference may not be the main factor explaining the gender pay gap but it does account for one-tenth of the differential, according to researchers. They find that men are more competitive and then self-select into industries that are more competitive. They’re therefore more highly compensated. The researchers draw this conclusion by analyzing the types of people who end up in the C-suite, MBA holders. They measured the competitiveness of research participants using a lab experiment.
Luigi Zingales: So we use a very simple game in which you are rewarded as a function of how many two digits number you sum up correctly. The subjects performed this task in two environments: one environment in which they simply are rewarded based on how many correct answers they have, and the other in which they have to win vis-à-vis three other competitors.
Narrator: In the first scenario, participants could earn $4 dollars per correct answer. In the second scenario, $16 dollars for a correct answer if they outperformed a group of their peers.
Luigi Zingales: After they have performed, we let them choose how they want to compete, whether they wanna be in a more competitive environment or they wanna compete against themselves. There is a disproportion number of women who prefer to compete against themselves and not against three other random players.
Narrator: The researchers collected participant data at graduation and also seven years later. They found that less competitive individuals, who were disproportionately women, were less likely to work in finance and consulting. Graduates who are hired in these two industries earn more than their peers. Upon graduation, female MBA students earned, on average, 15 percent less than their male counterparts. These differences persisted after graduation, but women were more likely than men to drop out of finance and consulting and move on to other industries.
The research suggests that if we ever hope to close the gender pay gap, we may need to inspire girls and women to embrace a more competitive spirit. (upbeat music)
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