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BehaviourinEconomicsituationsII.pptxBehaviour in economic situations II
Notes from “Gender differences in Behavioral Traits and Labor Market Outcomes” (citation to be added)
This article provides a nice survey of both economic and psychological studies on this topic, and includes references not in text.
Data mostly from US, but international references as wellWhy
Two questions:
Why do men and women sort into different careers?
Why does share of women in a given occupation decrease with seniority?
Focus on 4 traits that emerge from literature:
Risk preference
Competitiveness
Propensity to negotiate
Social attitudes
These traits are not independent
(Seem to relate traits with preferences)
Will follow order in paper.
Risk preference
- studies from both disciplines find women are LESS tolerant than men, on average
- depends on context – see discussion in Eswaran
How does this affect labor market behavior?
- all else equal, men more likely to sort into occupations with higher risk – physical and/or financial.
-(I have not seen any paper that mentions the high risk women undertake in pregnancy)
Why does this matter?
- more risky occupations tend to have higher salaries/wage rates.
- utility is increasing in income (can buy more with higher income, all else equal) and decreasing in risk (seems to be true for majority of market participants).
- higher salaries compensate for higher risk
(what have we learned about this from COVID-19 and essential services)
- if men are less risk averse, the minimum income required to hire men will be less than that required to hire women.
Is this really a preference regarding risk?
What else might yield observed results?
Greater aversion to losses
Different subjective evaluations of probabilities (does everyone know own risk, as we assume in most undergrad econ courses?)
Uncertainty about preferences or payoffs
Correlation with economic outcomes?
1. educational choices
If technical area perceived as being more risky than other areas, women might choose less risky fields.
Risk aversion may affect strategies used in taking tests
2. test performance
If women are more risk averse (on average) than men, may be less likely to guess on tests
Multiple choice, true/false..
Marks may be lower – on standard tests used for entry to fields of study/certifications (might this be a problem for online exams? Open book?)
Other choices?
Finances and investment – women may choose a lower proportion of equity in portfolios
Regarding the stock market crash of 2008-09, and the gender ratio in traders, see
Wall Street wants more female traders.
Occupational choice
Gender differences in competitiveness
Subjective, difficult to measure
2 measures suggested in literature:
willing to enter a tournament (observable) and
“competitiveness trait” (not directly observable)
Why does this matter?
Promotion (and associated higher salaries) may require taking risks.
Evidence on differences in willingness/ability to compete is mixed – depends on context.
Source of differences?
a) biology: not obvious. As an anecdote, not data, I have seen reports that females and men are most similar in risky behaviour and competitiveness when women are menstruating. (I will try and find a reference.)
b) gender stereotypes about tasks: some are perceived as more “suitable” to one gender rather than the other. Examples? Math, nursing, day care workers, university professors…
c) culture and social norms: the gender c
omposition of some professions differs across cultures. Example? Another anecdote: an economist from Russia once told me that in Russia most economists, and doctors, were female; these were considered low status occupations.
One reference comparing female ratios in medicine: Women's Participation in the Medical Profession: Insights from Experiences in Japan, Scandinavia, Russia, and Eastern Europe/
