Overconfidence and Gender Equality in the Labor Market

Spencer Bastani, Thomas Giebe and Oliver Gürtler

No 220, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: "Using a promotion signaling model in which wages are realistically shaped by market forces, we analyze how male overconfidence combined with competitive workplace incentives affects gender equality in the labor market. Our main result is that overconfident workers exert more effort to be promoted, which translates into a higher probability of promotion and superior wage growth. Interestingly, workers who are not overconfident have higher expected ability conditional on promotion than overconfident workers. However, overconfident workers accumulate more human capital through learning-by-doing and therefore have higher expected productivity. Because overconfident workers compete fiercely, they incur higher effort costs and discourage their colleagues, and we find that overconfidence can be either self-serving or self-defeating for the overconfident worker. "

Keywords: overconfidence; promotion; competition; gender gap; tournament; theory (search for similar items in EconPapers)
JEL-codes: C72 D91 J16 J24 M51 M52 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2023-03
New Economics Papers: this item is included in nep-hrm and nep-lma
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https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_220_2023.pdf First version, 2023 (application/pdf)

Related works:
Working Paper: Overconfidence and Gender Equality in the Labor Market (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:220

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