Taste for Competition and the Gender Gap Among Young Business Professionals

Ernesto Reuben, Paola Sapienza, Luigi Zingales

NBER Working Paper No. 21695
Issued in November 2015
NBER Program(s):Corporate Finance, Labor Studies

Using an incentivized measure of test for competition, this paper investigates whether this taste explains subsequent gender differences in earnings and industry choice in a sample of high-ability MBA graduates. We find that “competitive” individuals earn 9% more than their less competitive counterparts do. Moreover, gender differences in taste for competition explain around 10% of the overall gender gap. We also find that competitive individuals are more likely to work in high-paying industries nine years later, which suggests that the relation between taste for competition and earnings persists in the long run. Lastly, we find that the effect of taste for competition emerges over time when MBAs and firms interact with each other.

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Document Object Identifier (DOI): 10.3386/w21695

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