In the spotlight
Why are women less competitive than men? The answer might lie in roles of risk and confidence, new research suggests.
Why do men and women have different jobs? A recent laboratory experiment by Roel van Veldhuizen, assistant professor in economics at Lund University School of Economics and Management, suggests that part of the story may be that women are less confident and dislike risks. This study, conducted with 424 German university students, is forthcoming in the Journal of the European Economic Association.
Even in 2022 men and women still have very different jobs. According to Statistics Sweden, in Sweden, 81 per cent of primary school teachers are women, whereas more than 80 per cent of IT workers and engineers are men.
Previous research has identified a pattern for why some professions are considered to be male or female. These studies point out that male jobs often tend to involve a lot of competition, either on the job itself (such as when working as a CEO) or on the road to get there (such as when working oneself up the company ladder).
New research from Lund University School of Economics and Management suggests something else. Previous research has shown that women tend to prefer a safe alternative over a tournament with a competitive focus. Economist Roel van Veldhuizen instead conducted an experiment in which participants choose between a gamble and a safe alternative. The gamble is created in such a way that its payment is very similar to the tournament studied in previous work. Since the gamble is no longer a competition, however, any dislike or love of competitions can no longer explain participants’ choices. The main result of this new study is that men are just as prone to choose the gamble as they are to choose the tournament. The women still go for the safer options.
“My research shows that removing the competitive element does not impact the way men and women make decisions. This implies that the reason that men compete more than women is not that they enjoy competitions more, but rather that they are more confident and less averse to uncertainty. In contrast to what previous research has assumed, it is not necessary to invoke a competitiveness trait to explain why women are less likely to compete,” Roel van Veldhuizen explains.
Historically it has been difficult to fully explain existing gender gaps in the labour market. Roel van Veldhuizen suggests that studying psychological differences between men and women may help better explain these differences.
“My contribution to the existing research lies in showing that uncertainty aversion and confidence – two traits well-studied and well-understood – may be sufficient to explain why women are more averse to competitions.”
Reducing uncertainty (e.g, by having fixed instead of performance-based pay) and removing the gap in confidence (e.g., by encouraging women to study STEM-fields) may therefore be a promising way to further reduce gender differences in the labour market, according to Roel van Veldhuizen.
Learn more: Gender Differences in Tournament Choices: Risk Preferences, Overconfidence, or Competitiveness? | Journal of the European Economic Association | Oxford Academic (oup.com)
Male and female jobs clearly differ along many more dimensions than just the amount of competition. To identify whether competition does indeed play a key role in explaining gender differences in the labour market, researchers have studied stylized environments that allow for isolating its role. In these studies, student participants are invited to come to a computer room to solve simple math problems. Participants then choose between a piece rate (50 cents per answer) and a tournament (2 Euros per answer for the best performer in a four-person group). These studies usually find that men select the competitive tournament option, whereas women prefer the piece-rate.
What is less clear is what it is about competitions that attracts men but pushes women away. Previous research has emphasized the role of competitiveness as a personality trait. That is, these studies argue that women simply enjoy competitive environments less than men, that is, they are less competitive. Yet intuitively, competitions are also similar to gambling in that the outcome is uncertain. If women are either more averse to uncertainty, or think that they have a lower chance of winning a competition, then this too could explain why women are less likely to compete. Roel van Veldhuizen’s experiments make it possible to see whether women’s relative reluctance to enter competitions reflects greater uncertainty aversion, lower confidence or a greater dislike for competitions than men.