Why Should Women Get Less? Evidence on the Gender Pay Gap from Multifactorial Survey Experiments

Abstract

Gender pay gaps likely persist in Western societies because both men and women consider somewhat lower earnings for female employees than for otherwise similar male employees to be fair. Two different theoretical approaches explain “legitimate” wage gaps: same-gender referent theory and reward expectations theory. The first approach states that women compare their lower earnings primarily with that of other underpaid women; the second approach argues that both men and women value gender as a status variable that yields lower expectations about how much each gender should be paid for otherwise equal work. This article is the first to analyze hypotheses contrasting the two theories using an experimental factorial survey design. In 2009, approximately 1,600 German residents rated more than 26,000 descriptions of fictitious employees. The labor market characteristics of each employee and the amount of information given about them were experimentally varied across all descriptions. The results primarily support reward expectations theory. Both men and women produced gender pay gaps in their fairness ratings (with the mean ratio of just female-to-male wages being .92). Respondents framed the just pay ratios by the gender inequalities they experienced in their own occupations, and some evidence of gender-specific evaluation standards emerged.