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Gender, piece rates and wages: evidence from matched employer–employee data
Address for correspondence: Uwe Jirjahn, Institut für Quantitative Wirtschaftsforschung, Universität Hannover, Königsworther Platz 1, 30167 Hannover, Germany; email jirjahn{at}mbox.iqw.uni-hannover.de
Why are women disproportionately on piece rates? We investigate three possible explanations: (1) Women are more likely to be on piece rates, because they have a shorter expected tenure than men. (2) A greater demand for flexibility between work and home attracts women to work place technologies suitable for variable pay based on individual performance. (3) Women prefer piece rates, because they are subject to less wage discrimination when objective performance measures are available. The weight of our empirical evidence supports the third hypothesis. The unexplained gender wage gap is substantially smaller in the piece-rate regime than in the time-wage regime.
Key Words: Gender • Pay • Tenure • Flexibility • Discrimination
JEL classifications: J33, J31, J16
Manuscript received January 28, 2002; final version received October 21, 2002.