[Futurity] How Cockiness and Risk Tolerance Add to the Gender Wage Gap

February 8, 2022

It’s well-known that on average men outearn women performing similar jobs. In Boston, this inequity can be close to 70 cents to the dollar earned by male colleagues. But, despite continuing efforts to close the gap, there may be other factors that cause the gap to widen or narrow. Futurity recently sat down with Patricia Cortes, Associate Professor in Markets, Public Policy, & Law, to discuss her recent study that found that risk aversion in women and overconfidence in men may be an underlying cause.

In a survey of Boston University Questrom School of Business alumni and undergraduates from 2013 to 2019, Cortes and her research colleagues found that women and men who accepted job offers later had a narrower pay gap than peers who accepted jobs earlier.

“If you’re risk-averse, you don’t want the risk of ending up with no job, so you have a lower reservation wage, a [minimum acceptable] wage you have in your head. If you think you’re really good, your reservation wage is higher: I’m not going to accept any job that’s less than $75,000.”

Patricia Cortes
Associate Professor in Markets, Public Policy, & Law