When trying to understand America’s persistent gender wage gap, researchers have in the past decade suggested that women are less competitive than men, and are therefore passed over for higher-ranking roles.
But a new study from the University of Arizona shows it’s probably not that simple; in fact, women are just as likely to enter into a competition as men – but only when there’s the option to share their winnings with the losers.
The study, published today in Proceedings of the National Academy of Sciences, was led by Mary Rigdon from the University of Arizona’s Center for the Philosophy of Freedom, in cooperation with Alessandra Cassar, a professor of economics at the University of San Francisco.
Gender wage gap persists
In 2021, women will earn 82 cents for every dollar earned by men, says Rigdon. This means women work nearly three months more to receive the same amount of pay as men. When these results are adjusted to cover age, experience, and level of education, women still earn about 98 cents on the male dollar – in other words, an equally qualified woman is paid 2% less than her male counterparts.
Economists have considered a few possible explanations for this, Rigdon says. One theory, known as the “human capital explanation”, suggests that there are gender differences in certain skills, leading women to careers that pay less. Another theory – perhaps the most widely considered – is patent discrimination.
The researchers decided to test the other prevailing theory – the competitiveness theory – because they reasoned that if women were so reluctant to compete, they would occupy fewer high-ranking positions at the top of major companies, a trend that is not represented in the growing presence of women in leadership roles.
“We thought it must be the case that women are as competitive as men, but they just exhibit it differently, so we wanted to try to get at that story and demonstrate that that is the case,” Rigdon says. “Because that’s then a very different story about the gender wage gap.”
Testing a troublesome theory
Rigdon and Cassar randomly assigned 238 participants – split nearly evenly by gender – to two different groups for the study. Participants in each of the two groups were then assigned to four-person subgroups.
For all participants, the first round of the study was the same: each was asked to look at tables of 12 three-digit numbers with two decimal places and find the two numbers that add to 10. Participants were asked to solve as many tables as possible – up to 20 – in two minutes. Each participant was paid $2 for every table they solved in the first round.
In round two, participants were asked to do the same task, but the two groups were incentivized differently. In the first group, the two participants in each four-person team who solved the most tables earned $4 per table solved, while their other two team members were given nothing. In the other group, the top two performers of each four-person team also earned $4 per table, but they had the right to decide how much of the prize money to share with one of the lower performing participants.
In the third round, all participants were allowed to choose which payment scheme they preferred from the two previous rounds. For half the study participants, this meant a choice between a guaranteed $2 per correct table, or potentially $4 per correct table if they became one of the top two performers in their four-person subgroup. For the other half of the participants, the choice was $2 per correct table, or $4 per correct table for the top-two performers with the option to share the winnings with one of the losing participants.
The number of women who chose the competitive option nearly doubled when given the option to share their winnings; about 60% chose to compete under that option, while only about 35% chose to compete in the winner-take-all version of the tournament.
About 51% of men in the study chose the winner-take-all option, and 52.5% chose the format that allowed for sharing with the losers.
While the sample size is relatively small, the results deserve attention.
Rigdon and Cassar have a few theories about why women might be more inclined to compete when the winnings are shared. One suggests that female participants are interested in controlling the way winnings are divvied up; another, popular among evolutionary psychologists, is that female participants may be inclined to smooth over bad feelings in a group setting. Yet the answer may lie less in biology and more in socialisation, perhaps that women are encouraged from a young age to be “nice=”: at this point, the jury’s still out.
“We really have to ask what it is about this social incentive that drives women to compete,” Rigdon says. “We think it’s recognising the different costs and benefits that come from your different biological and cultural constraints. But at the end of the day, I think we still have this question.”
Rigdon and Cassar are now designing a study to drive to the heart of that question.
“If we’re finally going to close the gender pay gap, then we have to understand the sources of it – and also solutions and remedies for it,” Rigdon says.