Gender and Economic Behavior Insights from Experiments

Gender and Economic Behavior: Insights from Experiments

Gender and Economic Behavior Gender an important factor in many economic decisions and outcomes. Gender differences in wages, prospects for advancement, occupational choice (Blau and Kahn (2000), Blau, Ferber and Winkler (2010)). Bertrand & Hallock (2001): Only 2. 5% of US executives are women, and they earn 45% less than male counterparts. Much fewer women in leadership positions in firms, in politics etc.

Gender Differences in: Risk-taking Altruism Beliefs (e. g. overconfidence) Competitiveness (in performance tasks, or negotiations/bargaining) Etc. • •

Experimental Literature on Gender • Documents differences • Explores the source of differences • Studies the role of institutions in influencing these differences (e. g. feedback, single-sex schooling etc. )

Different explanations: ability differences, familycareer balance, discrimination… Another explanation: men and women might have different responses to and attitudes toward competition. Competitive career path for high-level positions, self-selection.

Gender and Competitiveness 1. Gender differences in the response to competition Gneezy, Niederle & Rustichini (2003): Men are motivated by competition than women. Piece-rate vs. tournament Single-sex vs. mixed groups (results mixed)

Gneezy (2004), in Israel • • Physical ed. Class Running When ran alone, no gender difference Boys’ performance improves in competition

Self-Selection Gender differences in choice of incentive schemes: Niederle & Vesterlund (2007): Piece-rate, tournament, choice, submit to tournament. Women shy away from competition. Piece-rate vs. tournament: 73% of males, only 35% of females.

Why? Nature vs. Nurture: Is it innate, or shaped by society? “Sex vs. gender”? Important for policy issues. Suppose you want to close the gap: • If nature, may need to make education system less competitive. • If nurture, socialize girls in a different way, keep education system competitive.

Gneezy, Leonard, List (2009): Compare a matrilineal society (India) with an extremely patriarchal society (Tanzania). • “Men treat us like donkeys” • --A Maasai woman (Hodgson, 2001) • “We are sick of playing the roles of breeding bulls and baby-sitters. ” • --A Khasi man (Ahmed, 1994)

Matrilineal society: Khasi in India

The Khasi Society • Females are holders of property • Lineage descends through the mother (matrilineal) • Youngest daughter is the heir, and does not leave the mother’s home. • Men live in their mother’s or wife’s home. • Women more involved in economic activity. • “Men’s rights to property” movement in Shillong city.

• The return to investment in the human capital of girls is retained within the household. • Khasi families can choose to raise the daughter they would like to keep in their household, not the daughter most likely to be preferred by other households.

Gneezy, Leonard & List (2009) Massai (Tanzania) vs. Khasi (India)

• 50% vs. 26% in Massai, 54% vs. 39% in Khasi. • The “men compete more” result is not universal, and societal factors can be important. • One interpretation: Khasi society may remove social barriers that prevent naturally competitive women from expressing their true personalities. • Or, the structure of the Khasi society may allow competitive women to earn greater rewards for their effort and to pass on wealth and competitive tendencies to their daughters, both of which increase the fecundity of competitive genes [gene-culture co-evolution]

Gender and Socialization • Data from adults do not tell us at what stage of the socialization process the difference starts. • Learning how competitiveness evolves through age can be important for policy. =>Study kids of different ages.

• Matrilineal (Khasi) vs. patriarchal (Kharbi) =>Both in Northeast India Very close in terms of location, so can keep other factors constant and have a cleaner comparison

Experiments on Children & Teens Booth and Nolen (2009)—the effect of single-sex education on risk-taking and competitiveness Gneezy and Rustichini (2004)—Boys perform better under competition. Dreber, Essen & Ranehill (2009)—No difference in 7 -10 year-olds’ reaction to competition. Cardenas et al. (2011)— 9 -12 year-olds, mixed results. Khachatryan (2011)—Girls as competitive, but less risk-taking around puberty. Sutter and Ruetzler (2011)— 3 -18 year-olds, boys more competitive.

Procedures • Use children aged 7 -15, elicit information on age, grade in school. • Task: Throwing tennis balls into a bucket from a distance (Gneezy et al. find no significant difference in performance across gender). • Subject selects between two incentive schemes: *Piece-rate: 10 Rupees per successful ball. *Tournament: 30 Rupees per ball, only if you are better than opponent. 0 if worse, 10 if tie. • Opponent is randomly selected—subject never learns whom she is competing with.

Results: Across Gender, Within Society Younger kids: No significant difference in matri, no significant difference in patri Older kids: Still no significant difference in matri, significant difference emerges in patri Girls compete less than boys (p<0. 01)

Results: Within Age & Gender, Across Society • Younger boys in matri vs. patri: No significant difference • Younger girls in matri vs. patri: No significant difference • Older boys in matri vs. patri: Patriarchal more competitive but only significant at 10% in a one-sided test • Older girls in matri vs. patri: Matri more competitive, p=0. 06

Within Society & Gender, Across Age Approaching puberty: No significant difference for either girls or boys in matrilineal Girls’ competitiveness declines in the patriarchal society (p=0. 07) Boys’ competitiveness increases in the patriarchal society (only significant at 10% in a one-sided test) Diff-in-diff regression: For boys, significant at p=0. 03, for girls, significant at p=0. 08.

Are Choices Ex-Post Optimal? • Risk-neutral subject should compete if 3 Pr(win)+Pr(tie)>1 • For each performance level, randomly draw 1000 opponents and calculate the win and tie probabilities • Check whether choices are optimal, given the empirical distribution of performance.

• Older girls in the patriarchal society underenter 62. 5% of the time, never over-enter. • In contrast, older girls in the matrilineal society under-enter 28. 6% of the time.

Discussion Socialization might act along with biological forces to create the difference around puberty “Gender-intensification theory” in psychology (Hill and Lynch (1983))—with puberty, more pressure for sex-typed behavior (e. g. precarious manhood) An interesting question: Are the societies biologically different as well? Further dimensions: Self-confidence, response to performance feedback, self-selection in other domains.