Women and the Competition Gap By Uri Gneezy and John List You think you know why less than 4% of Fortune 500 CEOs are women? Scholars have theorized for decades about the reasons why women can’t seem to make faster progress in breaking through the glass ceiling. The sad fact is that while women are doing better than men in some areas, such as higher education, men still occupy the highest ranks of society in the United States and around the world. The proportion of women in the U.S. workforce rose from 48 percent in 1970 to 64 percent in 2011,1 but today, only one in five senior management positions are held by women. Some consider these facts as an achievement, since they are the highest in U.S. history. Yet, women are still paid less than men for equivalent jobs. Even in public positions women still have not achieved parity. They still hold fewer than 17 percent of Congressional seats, and about the same percentage of corporate board seats. We’ll try to convince you that an important contributor to this gap in labor market outcomes is the different ways in which men and women react to incentives. In particular, women tend to avoid competitive settings and jobs in which salary is determined by relative rankings. But why do women and men react differently to incentives? And how important is the culture we’re born into in making us more or less competitive? We couldn’t just take for granted, in the absence of data, that women were innately less competitive than men. We decided to start collecting evidence by looking at ordinary men and women in their natural habitats and doing things people do every day—say, participating in a gym class or answering job ads on Craigslist—and we used the full gamut of experimental tools at our disposal to answer these questions: To what degree are the differences between men and women (such as levels of aggression, competitive drive, and wage-earning power) truly innate? To what degree are they culturally learned? In the end, we combine evidence from the United States with data we collected from our travels to the foothills of the Kilimanjaro and to North East India to answer this question. We’ve come up with unique evidence for the reasons for the persistent differences we observe between men and women, particularly when it comes to competition. A Distaste for Competition We started with a simple lab experiment showing that women hold back when they are in competitive environments.2 In a study at Technion, the so-called “MIT of Israel,” we set up an experimental game that involved solving as many mazes as one could in fifteen minutes, and receiving a dollar for every maze solved. When we then measured how well participants in these groups did, we found that the women performed pretty much the same as the men. But other groups of participants were given a competitive incentive: the person who solved the most mazes was paid proportionally more. In the heat of the battle, would a woman increase her effort? It turned out that the male participants responded to the competitive incentive by significantly increasing the number of mazes they solved during the fifteen minutes, but the other women did not perform as well. In the competitive condition, the women solved, on average, the same number of mazes as they did in the noncompetitive one. The hypothesis that women are less competitive than men seemed to hold firm. In a later experiment, we mimicked something you might remember from your childhood.3 Think about running as fast as you can alone, or next to someone else. If you are competitive, just having someone running next to you might motivate you to run faster and win an imaginary “race.” You just transformed an innocent situation into a competition. And if you’re less competitive, maybe you don’t care who’s next to you—you just run fast. As you might have guessed, we wanted to test whether young boys and girls would have different tendencies to be competitive. To do so, we went to visit some fourth-grade school kids in Israel. In a physical education class, we first asked kids to run forty meters on a track, one at a time. After the teachers timed the individual students’ results, the students who ran at similar speeds raced against each other. We didn’t offer incentives, and we didn’t even tell the kids that this was a competition. The kids simply had to run neck and neck. As we found in the Technion maze experiment, the boys ended up reacting more strongly to the competitive environment, running faster than when they had run alone. The girls, again, didn’t seem to react to the heightened competition. They ran about as fast as when they had run alone—even when they were competing against only girls. Once more, it looked like girls didn’t do as well in a competitive context. Next, we wanted to go out of the lab into the real world and test whether such gender differences in competitiveness survive in the wild. So we conducted a large-scale field experiment on Craigslist.4 In this experiment, we wanted to directly discover the factors that drive people to apply for entry-level jobs. How would men and women respond to different compensation scenarios? Would women go after jobs that required some competitiveness and risk-taking if the salary offered were higher? To get some answers, we conducted a very large field experiment in which we placed two ads on Internet job boards in sixteen cities for an administrative assistant, one of the most common jobs in the United States. An example of one of our job postings in Seattle looked as follows: Posting Category: admin/office jobs Title: Seeking Sports News Assistant The Becker Center is seeking a Seattle-area administrative assistant to help gather information on sports stories in the Seattle region. While the Becker Center is based in Chicago, we have a satellite project in Seattle. The assistant will provide us with up-to-date information on local news and views on basketball, football, baseball, soccer, Nascar, golf, tennis, hockey, and other sports. Responsibilities for the position include reading local sports-related news coverage (pro, semi-pro, and college) and preparing short reports. The successful candidate will also be comfortable with typical administrative duties—light correspondence, proofreading, filing, email and phone communication, etc. Compensation: Hourly Our second job description looked almost identical to this one, but it didn’t mention sports. Instead, the description noted, “The assistant will provide us with up-to-date information on community events, arts and culture, business, entertainment, policy issues, crime, and other stories. Responsibilities for the position include seeking out, reading, and summarizing local news stories and preparing short reports.” Over a period of four months, nearly 7,000 interested job seekers applied for these jobs listed in the various cities.5 Upon responding to our ad, we told the job seekers the wage structure for the jobs: some were told that they would be paid on an hourly basis, while others were told that their pay would depend on how they performed compared to a coworker. Our goal was to see if the competitive aspect influenced one sex more than the other.6. What do you think we found after placing several months of ads on Craigslist? Not surprisingly, guys were more interested in the sports-oriented ad and women responded to the non-sports-oriented ad: whereas 53.8 percent of the job seekers for the sports- related job were women, 80.5 percent of those responding to the alternate job were female. But the real differences showed up when we described the compensation schemes. According to one scheme, the job would pay a flat $15 per hour. Not too shabby for an entry- level office administration gig. The competitive pay scheme, on the other hand, rewarded the workers based on how they performed in relation to a coworker. Applicants were told that they would be paid $12 per hour but would be compared to another worker, and whichever of the two performed better would receive a bonus of $6 per hour in addition to the $12-per-hour base pay. In this way, each of the two compensation schemes paid an average of $15 per worker, but one was highly incentivized, whereas the other was not. You might be surprised (and saddened) by the actual gender breakdown of who applied for each kind of job. In general, women didn’t like the competitive option; in fact, they were 70 percent less likely than men to go after the competitive job. Further, the women who did apply for the highly incentivized job tended to have more impressive resumes than the men who applied for those same jobs. These findings seemed to underscore the fact that, when it comes to competition, men aren’t nearly as shy as women. A Trip to Tanzania All of this gives rise to several obvious but uncomfortable questions: is the lack of competitiveness inherent in women or a learned behavior? If the latter, exactly what does nurture—or the fact that culture might be linked to their competitive inclinations—have to do with their learning how competitive they should be? And would our own daughters have a fair shot at succeeding in a competitive society? To address these questions, we decided we needed to leave Western culture and run some tests in other parts of the globe.