February 13, 2022
World Economic Forum recently published insight featuring Patricia Cortes, Associate Professor in Markets, Public Policy, and Law, discussing her research on the gender pay gap found in Greater Boston.
The article elaborates on the findings of Patricia and her coauthors, based on a survey of 2,000 Boston University Questrom School of Business alumni and students from 2013 to 2019. From their research, Patricia and her colleagues discovered that risk aversion in women and overconfidence in men are two major factors that may sometimes cause the wage gap to narrow or widen. In their research, the authors explain that on average, more risk-tolerant students tend to accept jobs later, and there is a strong positive relationship between risk tolerance and accepted offer wages. Patricia elaborates on the correlation between the gender pay gap narrowing and later job offer acceptance rates by stating,
“Men tend to be more overconfident. Overconfidence means you think you’re better than you really are. 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.”
Patricia Cortes
Associate Professor in Markets, Public Policy, & Law