Stanford researchers find that male over-confidence might be costing the tech industry billions

Anyone working in tech will know the type: the mini-Elon Musk. The young man who thinks that his brilliant idea is going to be the next Uber, Spotify or Tesla. He presents himself with confidence and assurance, but you suspect that, deep down, he has no idea what he is talking about.

There are, of course, women of this type as well. And we certainly shouldn’t (based on a few anecdotes) draw conclusions about men and women as a whole.

That’s where researchers can contribute: to find out whether men are, in general, overly-confident in their own abilities and how this relates to their pay. Investigating this issue, Adina Sterling and her colleagues at Stanford started by looking at how ‘self-efficacy’ of men and women in comparison with their University grades. Self-efficacy was measured by asking study participants how confident they are in their ability to develop products; build prototypes and mathematical models; and construct technological systems.

Graduates’ confidence in these areas is not related to their University grades: C+ students feel just as confident as A+ students. But it is related to gender: independent of their actual grades, men feel more confident in their abilities than women. This is shown in the plot below from the scientific article.

Sterling and her colleagues went on to look at the role confidence played in determining starting salary of graduates in STEM. They found that men with higher levels of self-efficacy have higher initial salary upon workforce entry. Grades, expectations about workplace culture or salary expectations could not explain salary differences: men didn’t expect to be paid more than women, they simply believed they were more competent. And their employers in STEM areas concurred.

In the study, starting salaries were (on average) $61,000 for women and $65,000 for men. Even at this entry point, tech and related companies are overpaying for equivalent skillsets. And there is reason to believe that pay differences are self-reinforcing: the fact that these over-confident young men are paid more will lead them to become even more confident that they are worth more. While more research is required to know exactly how these initial differences play out in the long run, the differences in males and female salaries are large. One study in 2013 showed that men with mathematical and engineering degrees earned on average $14,000 more than women in the same industry (women $65,000 compared to men’s $79,000).

Tech and engineering is paying a very high premium to support the misguided over-confidence of men.

The framing of this article arose from a breakfast discussion with my wife, Lovisa Sumpter. She claims I stole her idea, but I am confident it was all mine.