Overconfidence, ambition, and risk taking and gender inequality in the school-to-work transition and early career labour market outcomes

Recent figures show that progress on eliminating the gender wage gap has been stagnant; nearly eight in 10 employers in the UK still have a gap in favour of men (Parliament. House of Commons 2018). At the same time, a range of studies has shown that men are more likely than women to overclaim knowledge or expertise, believe in their own abilities, demonstrate ambition, and take risks.

This project will bring the key concepts of overconfidence, ambition, and risk taking, identified by psychologists and human resources (HR) professionals as important, into the analysis of gender gaps in occupational, university, and early career labour market outcomes. It will also attempt to separate the socialisation of boys and girls from inherited traits through the use of polygenic risk scores on risk tolerance and early measures of the other socio-emotional characteristics using longitudinal data.

Using the British Cohort Study 1970 (BCS70), Next Steps (formerly the Longitudinal Study of Young People in England, LSYPE, 1990), and the Millennium Cohort Study (MCS, 2000), I will explore gender gaps in hourly wages, ambitious university plans, and high-status career aspirations and outcomes. I will create measures of overconfidence, ambition, and risk-taking using existing survey items, administrative data on educational attainment, and polygenic risk scores, which will be made available to future researchers.

The overconfidence measure will be constructed by comparing an individual's academic self-concept, how good they think they are at school, from their actual attainment on standardised tests. The measure of ambition will be created using information on whether or not they aspire to attend university or high-status careers. Risk taking is captured in several of the datasets and in two of the datasets, the availability of the polygenic risk score for risk tolerance will allow me to disentangle the nurture vs. nature elements of these gaps.

These measures will be used to estimate whether overconfidence, ambition, and risk-taking can explain why women earn less than men, are less likely to aspire to a high-status university or job, or enter into a high status or high earning job even if they have the same level of education. I will conduct this analysis across the earnings distribution and rankings of universities and occupations to explore if these socio-emotional characteristics can explain the gap for the highest paying and most prestigious institutions and jobs.

The transition from school to work is seen as particularly important in terms of career trajectories. The gender wage gap already exists shortly after labour market entry, making early career an important time to understand. Previous research on early career gender gaps has mostly been conducted with generations born 1970 or earlier and only used one cohort.

As society and higher education contexts have changed, with the expansion of HE post-1992 for example, exploring early career gender gaps across several recent generations will shed light on how this transition has changed over time. This is especially important as women have overtaken men in higher education participation and in the context of research showing that "soft skills" have become increasingly important in the labour market.

This means that overconfidence, ambition, and risk taking may be even more rewarded in recruitment and promotion practices, leading to greater gender inequality, despite the increased educational attainment of women.

This project will create evidence that policymakers and employers can use to close gender gaps in the labour market. Guidance counsellors at schools and human resources teams will be able to use the findings to adapt their recruitment and promotion processes and more fairly assess men and women.