The Effect of Gender Discrimination on Labor Supply

We conduct experiments on an online platform to investigate the causal effect of gender discrimination on labor supply decisions. Controlling for the piece-rate wage, workers who face negative gender-discriminatory wage inequality supply substantially less labor compared to workers who face gender-neutral wage inequality (−0.16 standard deviations) and compared to workers with equal wages (−0.21 standard deviations). We also examine the effect of positive discrimination, differences between men and women, and the role of beliefs about facing discrimination. Our results provide evidence for decreased labor supply in reaction to discrimination being a novel mechanism contributing to the gender gap in earnings.