Gender Gaps in Performance PayNew Evidence from Spain

Abstract

This paper analyzes the gender gap in the performance�pay component of hourly wages received by workers in Spain using detailed information drawn from a large wage survey for 2006. Under the assumption that performance pay is determined in a more competitive fashion than the remaining wage components, there should be less room for gender discrimination. However, this is not what we find. After controlling for observable characteristics, non-random selection into performance-pay jobs and for segregation into different firms and occupations, the estimated adjusted gap in favour of male remains large (around 30 log points). Further, there is evidence of a �glass ceiling� pattern throughout the distribution of performance pay. After examining alternative hypotheses that could rationalize these findings, we conjecture that employers� discrimination, possibly due to monopsonistic power, might be the one which is more consistent with the evidence