Program on Education Policy and Governance Working Papers Series Gender Differences in Market Competitiveness in a Real Workplace: Evidence from Performance-based Pay Tournaments among Teachers

In this paper I examine how individual performance in a real work place is affected by the gender mix of the competitive group. The competition is among math, English and Language (Hebrew or Arabic) teachers who participated in a rank-order tournament that rewarded teachers with large cash bonuses based on the test performance of their classes. Teachers were awarded bonuses according to their ranking in the tournament. Ranking was based on a value added measure calculated by the difference between the actual mean performance of the teacher’s class and a value predicted on the basis of a regression that controlled for the students’ characteristics and a school-level fixed effect. Therefore teachers competed against other teachers of the same subject in their own school and they were told so explicitly. This framework created three distinct types of competitive environment which allow examining whether women succeed differentially when competing only against women or also against men. The evidence suggest that the average ranking, winning rate and awarded prize did not differ by gender nor between teachers in competition groups with only female teachers and in schools with teachers of both genders. I also examine a few mechanisms in the paper that can explain these results. I found no differences by either gender or by the gender mix of the competition group in teachers’ awareness and familiarity with the program and its rules, and in effort and teaching methods. However, large gender differences emerge in teachers’ expectations about success in the competition and in their perceptions about the effectiveness of the incentive scheme in improving students’ achievements. The relative pessimism of female teachers about their success in the tournament and the effect of the program on students’ achievement are on average very similar in the two types of competition environment. Examining directly the impact of the bonus program suggests that it did not vary by type of competitive environment and also by male and female teachers. For example, female teachers in only female competition groups and female teachers in mixed gender competition groups were equally effective in improving their students’ achievements as a response to the financial incentive.