Overconfidence and Gender Differences in Wage Expectations

45 Pages Posted: 29 Jul 2020

See all articles by Stephanie Briel

Stephanie Briel

University of Hohenheim

Aderonke Osikominu

University of Hohenheim

Gregor Pfeifer

The University of Sydney

Mirjam Reutter

University of Hohenheim

Sascha Satlukal

University of Hohenheim

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Abstract

We analyze the impact of (over-)confidence on gender differences in expected starting salaries using elicited beliefs of prospective university students in Germany. According to our results, female students have lower wage expectations and are less overconfident than their male counterparts. Oaxaca-Blinder decompositions of the mean show that 7.7% of the gender gap in wage expectations is attributable to a higher overconfidence of males. Decompositions of the unconditional quantiles of expected salaries suggest that the contribution of gender differences in confidence to the gender gap is particularly strong at the bottom and top of the wage expectation distribution.

Keywords: gender pay gap, wage expectations, overconfidence, decomposition analyses, unconditional quantile regressions (RIF-Regressions)

JEL Classification: J16, D84, D91, C21

Suggested Citation

Briel, Stephanie and Osikominu, Aderonke and Pfeifer, Gregor and Reutter, Mirjam and Satlukal, Sascha, Overconfidence and Gender Differences in Wage Expectations. IZA Discussion Paper No. 13517, Available at SSRN: https://ssrn.com/abstract=3660264 or http://dx.doi.org/10.2139/ssrn.3660264

Stephanie Briel (Contact Author)

University of Hohenheim

Fruwirthstr. 48
Stuttgart, 70599
Germany

Aderonke Osikominu

University of Hohenheim ( email )

Stuttgart
Germany

Gregor Pfeifer

The University of Sydney ( email )

University of Sydney
Sydney, NSW 2006
Australia

Mirjam Reutter

University of Hohenheim

Fruwirthstr. 48
Stuttgart, 70599
Germany

Sascha Satlukal

University of Hohenheim

Fruwirthstr. 48
Stuttgart, 70599
Germany

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