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The gender pay gap in top corporate jobs in Denmark: Glass ceilings, sticky floors or both?

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Author Info

  • Nina Smith
  • Valdemar Smith
  • Mette Verne

Abstract

Purpose – This study aims to analyse the gender pay gap among CEOs, VPs and potential top executives. The authors seek to analyse how much of the gap is explained by differences in individual characteristics and how much is explained by firm characteristics and discriminatory processes. Design/methodology/approach – The paper estimates compensation functions based on a panel of employer-employee data set covering all Danish companies in the private sector with more than 50 employees during the period 1996-2005. Findings – The authors document that when controlling for a large number of observable characteristics and time-invariant characteristics, there still exists a large gender compensation gap among top executives in Denmark. For VP and potential top executives, the estimated gap increased during the period 1996-2005 while for the small and selected group of CEOs, the corrected gender gap decreased slightly. Research limitations/implications – The study does not claim to identify causal links between top executive compensation and individual or firm specific background characteristics. Practical implications – The extension of the family-friendly schemes may have had negative boomerang effects on the compensation and careers of all women, irrespective of whether they become mothers or not. Especially for those women aiming to reach the top of the organisation, these effects may be important because potential career interruptions are expected to be more severe for this group. Originality/value – This study adds to the limited empirical literature on the gender pay gap among the narrow group of top executives using a large panel employer-employee data set of all Danish companies.

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal International Journal of Manpower.

Volume (Year): 32 (2011)
Issue (Month): 2 (May)
Pages: 156-177

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Handle: RePEc:eme:ijmpps:v:32:y:2011:i:2:p:156-177

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Related research

Keywords: Chief executives; Denmark; Gender; Glass ceilings; Pay structures;

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References

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  1. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away from Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, MIT Press, vol. 122(3), pages 1067-1101, 08.
  2. Booth, Alison L., 2009. "Gender and Competition," CEPR Discussion Papers 7437, C.E.P.R. Discussion Papers.
  3. Marianne Bertrand & Kevin Hallock, 1999. "The Gender Gap in Top Corporate Jobs," Working Papers 805, Princeton University, Department of Economics, Industrial Relations Section..
  4. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October.
  5. Anne Busch & Elke Holst, 2009. "Glass Ceiling Effect and Earnings: The Gender Pay Gap in Managerial Positions in Germany," Discussion Papers of DIW Berlin 905, DIW Berlin, German Institute for Economic Research.
  6. Nabanita Datta Gupta & Ronald L. Oaxaca & Nina Smith, 2006. "Swimming upstream, floating downstream: Comparing women's relative wage progress in the United States and Denmark," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 59(2), pages 243-266, January.
  7. B. Burcin Yurtoglu & Christine Zulehner, 2007. "The gender wage gap in top corporate jobs is still there," Vienna Economics Papers 0701, University of Vienna, Department of Economics.
  8. Eriksson, Tor, 2001. "How common are the new compensation and work organization practices and who adopts them?," Working Papers 01-8, University of Aarhus, Aarhus School of Business, Department of Economics.
  9. Lundberg, Shelly, 2005. "Men and islands: Dealing with the family in empirical labor economics," Labour Economics, Elsevier, vol. 12(4), pages 591-612, August.
  10. Datta Gupta, Nabanita & Smith, Nina & Stratton, Leslie S., 2005. "Is Marriage Poisonous? Are Relationships Taxing? An Analysis of the Male Marital Wage Differential in Denmark," IZA Discussion Papers 1591, Institute for the Study of Labor (IZA).
  11. Siri Terjesen & Val Singh, 2008. "Female Presence on Corporate Boards: A Multi-Country Study of Environmental Context," Journal of Business Ethics, Springer, vol. 83(1), pages 55-63, November.
  12. Eriksson, Tor, 1999. "Executive Compensation and Tournament Theory: Empirical Tests on Danish Data," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 262-80, April.
  13. Murphy, Kevin J., 1999. "Executive compensation," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 38, pages 2485-2563 Elsevier.
  14. Lazear, Edward P & Rosen, Sherwin, 1990. "Male-Female Wage Differentials in Job Ladders," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages S106-23, January.
  15. Nina Smith & Valdemar Smith & Mette Verner, 2005. "Do Women in Top Management Affect Firm Performance? A Panel Study of 2500 Danish Firms," CIE Discussion Papers 2005-03, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
  16. Jurajda, Stepán & Paligorova, Teodora, 2009. "Czech female managers and their wages," Labour Economics, Elsevier, vol. 16(3), pages 342-351, June.
  17. David Bjerk, 2008. "Glass Ceilings or Sticky Floors? Statistical Discrimination in a Dynamic Model of Hiring and Promotion," Economic Journal, Royal Economic Society, vol. 118(530), pages 961-982, 07.
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Citations

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Cited by:
  1. Frederiksen, Anders & Kato, Takao, 2011. "Human Capital and Career Success: Evidence from Linked Employer-Employee Data," IZA Discussion Papers 5764, Institute for the Study of Labor (IZA).
  2. Kunze, Astrid, 2013. "Gender differences in career progression: Does the effect of children capture low work effort?," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79705, Verein für Socialpolitik / German Economic Association.
  3. Merlino L.P. & Parrotta P. & Pozzoli D., 2014. "Gender differences in sorting," Research Memorandum 022, Maastricht University, Graduate School of Business and Economics (GSBE).
  4. Barbara Liberda & Joanna Tyrowicz & Magdalena Smyk, 2013. "Age-productivity patterns in talent occupations for men and women: a decomposition," Working Papers 2013-27, Faculty of Economic Sciences, University of Warsaw.
  5. Smith, Nina & Smith, Valdemar & Verner, Mette, 2011. "Why Are So Few Females Promoted into CEO and Vice-President Positions? Danish Empirical Evidence 1997-2007," IZA Discussion Papers 5961, Institute for the Study of Labor (IZA).
  6. Lam, Kevin C.K. & McGuinness, Paul B. & Vieito, João Paulo, 2013. "CEO gender, executive compensation and firm performance in Chinese‐listed enterprises," Pacific-Basin Finance Journal, Elsevier, vol. 21(1), pages 1136-1159.

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