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The difference in earnings between men and women is a well-known phenomenon that has been studied from many different perspectives. A number of factors have been identified as causing the earnings gap, such as differences in performance, differences in working hours and career paths, differences in pay for the same performance, and lower average earnings for professions mainly exercised by women. However, even when restricting attention to one of these factors, many new questions arise. For example, there can be various reasons for differences in performance, such as education and ability, as well as the gen- der composition of the workplace. The gender of one’s colleagues may be one of the factors determining whether working conditions are experienced as being hostile or as encouraging, as stimulating or stifling. We focus on this potential source of performance differentials between men and women which could contribute to the gender gap in earnings.
The organization of work in teams has become widespread. As the success of a team depends crucially on the interaction among the team members, the question of how diversity of the teams affects performance has become central. In particular,
when setting up team work in a firm, the question arises of how to group the employees into teams. Should they be of the same gender, culture, nationality, age, race or should they differ in some or all of these characteristics? Economic theory has focused on heterogeneity of team members with respect to ability, but it does not provide any clues as to the issue of how different cultural backgrounds or the gender composition of teams affects outcomes. The empirical literature on diversity in teams yields mixed evidence for the effect of diversity on performance (for an overview see Milliken & Martins, 1996). For example, Hamilton, Nickerson, and Owan (2003) show that team diversity with respect to ability has a significant positive impact on productivity. Adams and Ferreira (2009) find a negative relationship between gender diversity in the board room and firm performance. In general, the results of empirical studies on directly observable attributes like gender suggest that an increase in diversity is more likely to have a negative effect on team performance.
Ivanova-Stenzel R and Kübler D (2011) Gender differences in team work and team competition. Journal of Economic Psychology 32(5): 797–808.
We study whether the gender performance gap is affected by the gender composition of teams. A real-effort experiment is employed with wages based either on the team’s performance, or on the outcome of a competition between teams. We find that, relative to a single-sex environment, gender diversity increases the gender performance gap with team pay whereas it decreases the gap with team competition. The results show that there can be a tension between the objective to maximize overall performance and to minimize gender inequality.