Understanding the Costs of Hiring Women in Pakistan

To reveal firms' preference to hire women and their top managers' willingness to comply with the social norm of strict physical separation of the sexes. We use a hypothetical choice method and a behavioral game with the Becker-Degroot-Marschak (BDM) mechanism.

2023-01-09

2023-12-31

We have three primary outcomes: 1) firms’ decision to hire women, 2) firms’ experience in hiring women, 3) top managers' willingness to comply with social norms for themselves, and 4) top managers' willingness to comply with social norms for their workers.

The first outcome, firms’ decision to hire women, comes from the hypothetical choice method. It is the reported probability for hiring women to fill the ten sawing positions at the hypothetical Company A.

The second outcome, firms’ experience in hiring women, comes from the survey. We construct the following variables to capture this outcome:
1. If a firm has hired women in the past at all by occupation types
2. Share of current female employees by occupation types

The third outcome, top managers' willingness to comply with social norms for themselves, comes from the marble sorting game. This is the lowest willing rate for the helper reported by each top manager. The greater the lowest willing rate is, the more willing he is to comply with the social norm of physical segregation of the sexes.

The fourth outcome, top managers' willingness to comply with social norms for their workers, comes from hypothetical questions after the marble sorting game. We ask top managers to report willingness to comply with social norms for their workers under different scenarios which vary by a) the level of visibility of workers' behaviors while working with the male and female helpers, and b) who requires the workers to work with the helpers (top manager or research team). This measure is meant to understand if top managers have different standards and concerns for social norm compliance for their workers who come from very different socio-economic backgrounds.

Hypothetical Choice Method:
We use the hypothetical-choice method to reveal firms’ preference to hire women. The basic concept of this method is the following. All respondents are shown a profile of a hypothetical company, A. Throughout this section, they are asked to think of themselves as the top manager of this hypothetical firm. As the top manager of Company A, they are tasked to fill ten sawing positions. They are then shown various scenarios in which some of the five economic costs associated with
hiring women are paid for by a special lottery and do not have to be paid for by Company A. Under each of these cost environments, they are asked to report the probability of filling the ten sawing positions with women as opposed to men.


Marble Sorting Game:
We conduct a marble sorting game with the Becker-Degroot-Marschak (BDM) mechanism (Becker et al., 1964) to elicit top managers’ willingness to comply with social norms that idealize strict physical separation of the sexes.
In this game, a top manager is asked to sort marbles for a short period of time for a monetary prize. The prize is determined by the quantity he sorts in the given time multiplied by a fixed rate. He is also offered a helper who can help him sort more marbles, thus increasing his prize earnings. Randomly chosen, 90 % of the sample is offered a female helper. If the female helper joins him to play the game, the quantity sorted by her times a different fixed rate will be given to him. In sum, his prize earnings, if he plays with the female helper, is the sum of the contributions by him and the female helper.
He is then asked to report the lowest rate at which he is willing to play this game with the female helper through the BDM mechanism. This is the rate that may be used to convert the female helper’s contribution into a monetary prize. However, whether the top manager plays with the female helper and the rate used to convert her sorted quantity to a monetary prize is determined by a randomly drawn rate. This rate is drawn after the top manager reveals his lowest willing rate. If the randomly drawn rate is greater than or equal to his willing rate, he plays the game with the female helper and uses the randomly drawn rate for her. If it is less than his willing rate, he plays alone. This random drawing is the key aspect of the BDM mechanism; it induces truth-telling because the top manager has no control over if he gets to play the game with the female helper.

The rest is offered a male helper, which produces a comparison group that enables us to learn about the roles of potential attributes, other than the helper’s gender, that may affect the norm compliance price point.

Randomization done in officer by a computer

Individual firm

No

0

600

Marble sorting games:
540 respondents receive female helpers, and 60 respondents receive make helpers

The sample size of 600 firms allows us to detect a change of 11.46 percentage points at the power of 0.8.

PAP_CostsOfHiringWomen.pdf