State University of New York College at Buffalo - Buffalo State College Digital Commons at Buffalo State Applied Economics Theses Economics and Finance 12-2016 The Role of Performance and Gender in Hiring Decisions Hayley Capshaw capshahe01@mail.edu Advisor Frederick Floss, Ph.D First Reader Frederick Floss, Ph.D Second Reader Theodore Byrley, Ph.D Third Reader Sudesh Mujumdar, Ph.D Department Chair Frederick Floss, Ph.D To learn more about the Economics and Finance Department and its educational programs, research, and resources, go to http://economics. Recommended Citation Capshaw, Hayley, "The Role of Performance and Gender in Hiring Decisions" (2016). Applied Economics Theses.edu/economics_theses/19 Follow this and additional works at: http://digitalcommons.edu/economics_theses Part of the Business Administration, Management, and Operations Commons The Role of Performance and Gender in Hiring Decisions By Hayley E. Harrison (Capshaw) An Abstract of a Thesis in Applied Economics Submitted in Partial Fulfillment Of the Requirements For the Degree of Master of Arts December 2016 State University of New York Buffalo State Department of Economics and Finance i ABSTRACT OF THESIS Gender is likely the first trait a person will notice when meeting someone new.
Typically, there isn’t much thought behind it when it is observed. There is just a basic understanding that this new individual is either male or female. Every characteristic going forward is built on that building block of gender. What if this first observation has a much deeper effect on the outcomes going forward than just knowing someone is male or female? What if it changes the entire relationship structure going forward? This thesis will discuss findings on a gender, negotiation, and risk preferences.
These findings are from an experiment that was directed solely for this thesis. We will analyze the outcomes of the experiment and speak to the effects those outcomes have on currently established theories. ii State University of New York Buffalo State Department of Economics and Finance The Role of Performance and Gender in Hiring Decisions A Thesis in Applied Economics by Hayley E. Harrison (Capshaw) Submitted in Partial Fulfillment Of the Requirements For the Degree of Master of Arts December 2016 Approved By: Frederick Floss, Ph.
Professor Chairperson of the Department of Economics and Finance Thesis Advisor Kevin J. Interim Dean of the Graduate School iii THESIS COMMITTEE Frederick Floss, Ph. Professor Chairperson of the Department of Economics and Finance Thesis Advisor Theodore Byrley, Ph. Associate Professor Department of Economics and Finance Sudesh Mujumdar, Ph.
Professor Chairperson of the Department of Economics and Marketing University of Southern Indiana iv TABLE OF CONTENTS ABSTRACT OF THESIS. ii CHAPTER ONE: INTRODUCTION. 1 CHAPTER TWO: LITERATURE REVIEW .1 Table of Outcomes for Objective Probability Lotteries .3 Budget Constraint Line and Indifference Curve .4 Backward-bending Labor Supply Curve. 14 CHAPTER THREE: METHODS .1 Subject Risk Preference Questionnaire .2 Piece Rate Screen Shot.
24 Task 1- Piece Rate. 25 Task 2- Manager’s Choice. 26 Role 1 - The Manager. 26 Role 2 - The Worker.
27 CHAPTER FOUR: RESULTS .1 Subject’s Safe Scores.2 F-Test Two-Sample for Variances Results .3 t-Test: Two-Sample Assuming Equal Variances Results.4 Gender and Correct Solutions Regression Output .5 Female Managerial Decisions .6 Male Managerial Decisions .7 Female Manager’s Hired Partners .8 Male Manager’s Hired Partners .9 Female Manager’s Rejected Partners .10 Male Manager’s Rejected Partners. 45 CHAPTER FIVE: CONCLUSION. 50 Instructions for the Experiment. 50 v vi CHAPTER ONE: INTRODUCTION “Woman seems to differ from man in mental disposition, chiefly in her greater tenderness and less selfishness; and this holds good even with savages… Man is the rival of other men; he delights in competition and this leads to ambition which passes too easily into selfness… with woman the powers of intuition, of rapid perception and perhaps of imitation, are more strongly marked the man; but some, at least, of these faculties are characteristic of the lower races, and therefore of a past and lower state of civilization” (Darwin, 1874 pp.
563-564) This is a quote from Charles Darwin’s The Descent of Man: And Selection in Relation to Sex article. It discusses the idea that men and women, in the most basic sense, are naturally different beings in their mental dispositions. Charles Darwin is considered by many to be the “father” of evolutionary thought. He is famous for his contributions to the science of evolution.
Darwin made the discovery that all species of animals descended from the same common ancestors. He spent his life researching how species’ characteristics change from one generation to the next. To be able to do this accurately, Darwin would have had to establish the building blocks first. For example, he wouldn’t have been able to tell that a sparrow’s beak had evolved or changed from the generation prior it if he didn’t thoroughly understand the first generations beak structure.
In the quote above, he discusses the different mental states that men and women come from and how that affects them. Man, comes from a place of competition and rivalry in the world around him. Woman, however, comes from the mindset of tenderness, compassion, and power intuition in the world around her. An evolutionary scientist from the 1800’s made these 1 distinctions long before gender preferences became a topic in the experimental world.
Since the beginning of the millennium, there has been a large uptick in the amount of experimental work done on gender difference and preferences. 3) So why did Darwin make this observation long before gender difference was a commonly discussed scientific topic? One reason could be because gender preferences and differences have such a profound effect on the world. Darwin’s comment is something that is widely accepted in society, women are known as care givers and men are the competitive individuals that rival others to provide for themselves and their families. While this is a known fact in society, and ingrained into individuals as children, what if this has a more profound effect that currently realized? What if this kind of automatic thinking causes more harm than good? These types of questions drove this thesis the first place.
There are many situations in life where both men and women are bucketed into these blanket categories and it makes a person wonder what the repercussions to this behavior are. Most undergraduate students in an economics major take a class based around the economics of the labor market. Typically, in this discipline the pay gap for male and female workers is discussed in detail. So, while two employees of different genders are performing the exact same jobs their pay is different.
Why is this so? If you have two people completing the exact same tasks why would anatomy come into play? This thesis was born from that question. We will not be able to answer completely why the pay gap exists but, hopefully, we can bring more understanding and knowledge to the overall issue. 2 The question that started this thesis was an easy one to come by but how to go above solving this puzzle will be a little more difficult. An experimental approach was chosen because it is critical to capture the actual interaction between a manager and a worker to be able to get to the core of this issue.
A worker’s pay typically starts with the manager that interviews them for the job. Since the first interaction an individual has with a manager greatly affects their pay it is quintessential for this thesis to be able to capture that interaction. If this interaction is better understood it could explain why a pay gap exists or at least could show the differences in men and women’s behavior during this situation. The best way to learn more about this interaction is to duplicate it and see what the results yield.
The way to accomplish that goal is to design an experiment and duplicate it numerous times in a lab. This analysis would shed light onto the question of whether or not gender plays a role in hiring decisions. While designing the experiment, research into other experiments that have already been published brought to light the factor of productivity into the hiring decision. To measure productivity, Price (2012) had subjects solve math problems in an effort to measure the impact of productivity on compensation choice.
Adding the element of productivity will allow the experiment to closely mirror reality. When an individual goes to a job interview at a company, they typically bring a resume, which is some signal of their productivity over their career. A manager has that information when they make the hiring and salary decision, so to be able to reflect that facet of reality in the experiment makes it more thorough and complete. The more thorough the experiment the more reliable the data gathered from it.
It was important while 3 designing this experiment to keep it as close to reality as possible. If the question of ‘Does gender play a role in hiring decisions?’ is to be answered, the experiment needs to be as close to reality as possible. When analyzing the interaction of a possible employee and a manager for the first time, an element of risk is also involved. Risk comes into play in two forms, from both the possible employee’s perspective, and the manager’s perspective.
The possible employee has the risk of saying or doing something that would discourage the manager from hiring them. This type of interaction could be something as simple as discussing vacation time and the manager getting the feeling this wouldn’t be a dedicated worker. This type of interaction, discussion about benefits or the job criteria was not an element built into the design of the experiment. If the possible employee is more of a risk taker, they might not be as worried to bring up vacation time or try to negotiate a higher salary than someone who is more risk adverse.
To be able to capture this facet of the individuals, the experiment had a built-in risk questionnaire that all participants took in the beginning. The manager’s risk preferences were also captured so it gives the insight to how risk affects the overall this strategic interaction. When attempting to answer the question of the effect of gender on hiring decisions, it is imperative to look at the question from all angles. It is possible that gender might affect the hiring decision, so to add more elements to the experiment was very important.
This is why performance and risk preferences were also captured. While attempting to research if gender is a large factor or not in hiring, the experiment was also built to capture other aspects that might give insight into the 4 strategic interaction. It was important that while designing the experiment, it wasn’t skewed in design by my belief that there would be a large effect of gender on hiring decisions. When Darwin wrote about the differences in male and female mental dispositions, he wasn’t only referring to employees and managers but men and women in their overall approaches to life.
He discusses how women are more caring and selfless than their male counter parts. If that holds true, does that mean a woman would be more concerned about helping others and giving care, therefore causing women to be more risk adverse so that the people around them are safer? Are men more risk loving since they are more competition driven and ambitious? Does their ambition cause them to worry less about risks and more about the rewards of their actions? These questions are ones that will not be answered without a shadow of a doubt in this thesis. However, the data collected in the experiment could shed light onto some of these questions and give more insight into the mental dispositions of males and females. “The theory of economics does not furnish a body of settled conclusions immediately applicable to policy.
It is a method, rather than a doctrine. An apparatus of the mind, a technique of thinking, which helps its possessors to draw correct conclusions.