Effort allocation in tournaments: The effect of gender on academic performance in Italian universities

We consider the academic performance of Italian university graduates and their labor market position 3 years after graduation. Our data confirm the common finding that female students outperform male students in academia but are overcome in the labor market. Assuming that academic competition is fair and that individual talent is equally distributed by gender, we suggest that the gender gap evident in degree scores is endogenously due to the greater effort exerted by female students. We find that females face a greater increase in labor market returns from signalling through academic performance. This higher prize explains the greater effort exerted by females and the higher probability of winning the academic competition.