Why should women get less? Evidence on the gender pay gap from multifactorial survey experiments

Gender pay gaps likely persist only in Western societies because both men and women consider somewhat lower earnings for female employees than for otherwise similar male employees to be fair. Two different theoretical approaches explain “legitimate” wage gaps: same-gender referents theory and reward expectations theory. The first approach states that women compare their lower earnings primarily with that of other underpaid women; the second approach argues that both men and women value gender as a status variable yielding lower expectations about how much each gender should be paid for otherwise equal work. This paper is the first to analyze hypotheses contrasting the two theories using an experimental factorial survey design. In 2009, approximately 1,600 German residents rated more than 26,000 descriptions of fictitious employees. The labor market characteristics of each employee and the amount of information given about each employee were experimentally varied across all the descriptions. The results primarily supported reward expectations theory. Both men and women produced an eight percent gender pay gap in their justice ratings. Just gender pay gaps were framed by the gender inequalities that individuals experienced in their occupations, and some evidence of gender-specific evaluation standards emerged. Several policy implications are discussed.