Personality and pay: do gender gaps in confidence explain gender gaps in wages?
Leonora Risse,Lisa Farrell,Tim R. L. Fry +2 more
- 01 Oct 2018
- Vol. 70, Iss: 4, pp 919-949
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TL;DR: In this paper, the authors explored whether gender patterns in personality traits contribute to the gender gap in hourly wage rates, focusing on traits that reflect an individual's confidence to take on a challenge.
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Abstract: This study explores whether gender patterns in personality traits contribute to the gender gap in hourly wage rates, focusing on traits that reflect an individual's confidence to take on a challenge. To capture confidence, we use a psychological measurement known as Achievement Motivation, which is dually comprised of 'hope for success' and 'fear of failure'. This personality dimension is examined in addition to the Big Five personality traits and Locus of Control (LOC). Using 2013 wage data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, our Oaxaca-Blinder decomposition model reveals that men's stronger hope for success, lower fear of failure and lower agreeableness contribute to the gender wage gap, while women's higher level of conscientiousness is the only trait that serves to narrow it. JEL J31 - Wage Level and Structure; Wage Differentials D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving J16 - Economics of Gender; Non-labor Discrimination
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References
Gender Differences in Preferences
Rachel Croson,Uri Gneezy +1 more
TL;DR: This paper reviewed the literature on gender differences in economic experiments and identified robust differences in risk preferences, social (other-regarding) preferences, and competitive preferences, speculating on the source of these differences and their implications.
Boys will be Boys: Gender, Overconfidence, and Common Stock Investment
Brad M. Barber,Terrance Odean +1 more
TL;DR: Theoretical models predict that overconedent investors trade excessively as mentioned in this paper, and they test this prediction by partitioning investors on gender by analyzing the common stock investments of men and women from February 1991 through January 1997.
Achievement motivation: Conceptions of ability, subjective experience, task choice, and performance.
TL;DR: In this paper, it is shown that ability can be conceived in two ways: high or low with reference to the individual's own past performance or knowledge, or competence relative to that of others, and that a gain in mastery alone does not indicate high ability.
Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment
Brad M. Barber,Terrance Odean +1 more
TL;DR: For example, this paper found that men trade 45 percent more than women and earn annual risk-adjusted net returns that are 1.4 percent less than those earned by women, while women perform worse than men.
4.2K
Trading is Hazardous to Your Wealth : The Common Stock Investment Performance of Individual Investors
Brad M. Barber,Terrance Odean +1 more
TL;DR: In this article, the authors argue that overconfidence can explain high trading levels and the resulting poor performance of individual investors, and that trading is hazardous to the wealth of the average household.