Performance Pay Systems and the Gender Wage Gap

Richard Fabling, Arthur Grimes and David C. Mare

No 291411, Motu Working Papers from Motu Economic and Public Policy Research

Abstract: We examine the relationship between performance pay systems and wages, paying particular attention to gender differences in outcomes. At the firm level, estimates suggest average wages are unaffected by changes in performance pay practices, but that the within-firm distribution of wages is stretched. This latter result is explained by worker-level regressions, showing that male workers with initially higher expected wages are more likely to benefit from increased use of performance pay in the firm. Given the apparent absence of such an effect on female wages and the concentration of prime-age men in the top quartile of the wage distribution, women, on average, benefit less from the operation of performance pay systems.

Keywords: Labor; and; Human; Capital (search for similar items in EconPapers)
Pages: 34
Date: 2012-12
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Persistent link: https://EconPapers.repec.org/RePEc:ags:motuwp:291411

DOI: 10.22004/ag.econ.291411

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