How does competition affect the gender gap?

Barcelona GSE Focus

“You should know how many incompetent men I had to compete with – in vain!” this is what Inge Lehmann, the first female seismologist and geophysicist in human history, said to describe the discrimination and competitive pressure she faced just for being a woman in a profession dominated by men.

The clearly unbalanced composition of professions by gender is unfortunately a phenomenon not only related to seismology or to past centuries. Women are underrepresented at the top of many professions and moreover, ceteris paribus, they tend to earn less than equally educated and equally experienced men. This gender gap has become a central concern in economics because its sources are still unclear. As Inge Lehmann correctly pointed out, discrimination is for sure a part of the picture, but is it the only cause of such disparities? How can we be sure that there is discrimination if we cannot objectively measure men’s and women’s performance?

In their Barcelona GSE Working Paper (No. 879), “Competitive Pressure Widens the Gender Gap in Performance: Evidence from a Two-Stage Competition in Mathematics,” Nagore Iriberri and Pedro Rey-Biel address such questions and find that, as Oscar Wilde said, “the truth is rarely pure and never simple.” In particular, the authors empirically show that the level of competitiveness of the work environment can widen the gender gap due to the different behavioral responses of women and men in front of competition.

Recent empirical findings have shown that women perform equally well than men in non-competitive environments while they tend to perform worse when facing competition. Iriberri and Rey-Biel show that this fact also has dynamic implications that can have important consequences for labor markets. The authors use a very fitting dataset to empirically prove that men and women tend to react differently to increases in competitive pressure. The more competitive the environment becomes, the worse women perform on average.

Empirical strategy and results

The authors use a dataset that is particularly well fitted to study the effect of increases in competitive pressure on different genders because it allows to measure in an objective way how different individuals perform. They collect data from a regional two-stage contest in mathematics for students ages 10-16. Students compete separated by age and they must complete a 90-minutes 25 multiple choice question math test in each of two stages. About 40,000 students compete in the first stage and only about 2,800 make it to the second stage where 146 students are selected as the best performers. That is, the authors are able to follow the same individual through the two stages, assuming she or he passes the first one, and measure the performance. The second stage is structured in a way that the questions are harder than the first one hence increasing even more the pressure already present due to the contest format.

The data are staggering. While 44% of the initial participants are females, only 34% of participant to the second stage and a meagre 13% of the 146 winners are females. Obviously these differences might be due to the fact that male participants were just better than the female ones for this particular sample, but this is not the case. The authors can control for math background of the participants, e.g. their grades at school. They find that even if women and men tend to have similar grades at school, men perform better than women in the first stage of the contest and that the performance gap increases in the second stage. Males earn 4.9 test points more in the first stage and the gap widens in the second stage by additional 2.4 points. Interestingly enough, the increase in gender gap due to the increase in competitive pressure does not come from a higher percentage of mistakes made by women, instead it is due to a higher number of omitted questions.

Thanks to their extensive dataset, the authors are also able to show that this gap is not due to discrimination or women failing the more difficult questions; quite the opposite. In fact, what they demonstrate is that there is no discrimination between genders and that women tend to underperform in relatively easier questions. The authors stress that the underlying mechanism remains unclear, for example whether it is due to gender differences in motivation, test preparation or parental encouragement. In any case, the authors show that the dynamic implications of increases in competitive pressure can be crucial for labor market outcomes because men and women have different responses to such changes in the environment. This is a key insight that cannot be overlooked when trying to design better integration policies and it points to the fact that the crucial word in Inge Lehmann’s quote is competition. It might be the case that the emphasis of modern economies and societies on competition and its benefits are the true inheritance of our androcentric past given that history and so institutions are written and designed by the winners.

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