At this AE reading group we are going to discuss the following paper: Bandiera, Oriana, Greg Fischer, Andrea Prat and Erina Ytsma. 2021. "Do Women Respond Less to Performance Pay? Building Evidence from Multiple Experiments." American Economic Review: Insights, 3 (4): 435-54. Negar Ziaeian will prepare a presentation.

Here is the abstract: Existing empirical work raises the hypothesis that performance pay—whatever its output gains—may widen the gender earnings gap because women may respond less to incentives. We evaluate this possibility by aggregating evidence from existing experiments on performance incentives with male and female subjects. Using a Bayesian hierarchical model, we estimate both the average effect and heterogeneity across studies. We find that the gender response difference is close to zero and heterogeneity across studies is small, while performance pay increases output by 0.36 standard deviations on average. The data thus support agency theory for men and women alike.