Performance Pay and the Gender Wage Gap in Spain

Sara De la Rica 1, Juan José Dolado2, Raquel Vegas3
1Universidad del País Vasco, Spain, 2Universidad Carlos III, Spain, 3FEDEA, Spain

Our goal in this paper is to dig deeper in the specific role played by Performance Pay (PP) as an explanatory factor for the gender pay gap in Spain. In the first part of the paper, we address the impact of PP on the observed gender gap in total pay throughout the wage distribution, since PP is bound to have substantially different effects at different quantiles. The second part focuses exclusively on the PP component of the wage and explores to what extent gender differences remain once observable individual controls have been accounted for. As before, we also examine this issue at different points of the wage distribution. Further, given that the group of individuals that receive PP are not likely to be a random sample of the distribution of all workers, we deal with potential selectivity bias. Preliminary results suggest that PP help explain at least partly the so-called “glass ceiling” effect. Highly skilled men are not only more affected by PP than observationally equivalent women, but also they receive more in terms of PP than their female counterparts.

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