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Gender-Specific Occupational Segregation, Glass Ceiling Effects, and Earnings in Managerial Positions: Results of a Fixed Effects Model

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  • Anne Busch
  • Elke Holst

Abstract

The study analyses the gender pay gap in private-sector management positions in Germany based on data from the German Socio-Economic Panel Study (SOEP) for the years 2001-2008. It focuses in particular on gender segregation in the labor market, that is, on the unequal distribution of women and men across different occupations and on the effects of this inequality on earnings levels and gender wage differentials in management positions. Our paper is, to our knowledge, the first in Germany to use time-constant unobserved heterogeneity and gender-specific promotion probabilities to estimate wages and wage differentials for persons in managerial positions. The results of the fixed effects model show that working in a more "female" job, as opposed to a more "male" job, affects only women's wages negatively. This result remains stable after controlling for human capital endowments and other effects. Mechanisms of the devaluation of jobs not primarily held by men also negatively affect pay in management positions (evaluative discrimination) and are even more severe for women (allocative discrimination). However, the effect is notlinear; the wage penalties for women occur only in "integrated" (more equally male/female) jobs as opposed to typicallymale jobs, and not in typically female jobs. Thedevaluation of occupations that are not primarily held by men becomes even more evident when promotion probabilities are taken into account. An Oaxaca/Blinder decomposition of the wage differential between men and women in management positions shows that the full model explains 65 percent of the gender pay gap. In other words: Thirty-five percent remain unexplained; this portion reflects, for example, time-varying social and cultural conditions, such as discriminatory policies and practices in the labor market.

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Bibliographic Info

Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 357.

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Length: 26 p.
Date of creation: 2011
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp357

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Keywords: Gender pay gap; managerial positions; gender segregation; glass-ceiling effects; Oaxaca/Blinder decomposition; fixed effects; selection bias;

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References

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  1. Elke Holst & Anita Wiemer, 2010. "Frauen sind in Spitzengremien der Wirtschaft unterrepräsentiert," Wirtschaftsdienst, Springer, vol. 90(10), pages 692-699, October.
  2. Francine D. Blau & Lawrence M. Kahn, 2001. "Understanding International Differences in the Gender Pay Gap," NBER Working Papers 8200, National Bureau of Economic Research, Inc.
  3. Simon Fietze & Elke Holst & Verena Tobsch, 2009. "Personality and Career: She's Got What It Takes," SOEPpapers on Multidisciplinary Panel Data Research 250, DIW Berlin, The German Socio-Economic Panel (SOEP).
  4. Lausten, Mette, 2001. "Gender Differences in Managerial Compensation - Evidences from Denmark," Working Papers 01-4, University of Aarhus, Aarhus School of Business, Department of Economics.
  5. Elke Holst & Anne Busch, 2009. "Glass Ceiling Effect and Earnings: The Gender Pay Gap in Managerial Positions in Germany," SOEPpapers on Multidisciplinary Panel Data Research 201, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  7. Ben Jann, 2008. "The Blinder–Oaxaca decomposition for linear regression models," Stata Journal, StataCorp LP, vol. 8(4), pages 453-479, December.
  8. repec:ilo:ilowps:344117 is not listed on IDEAS
  9. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  10. Arnaud Chevalier, 2006. "Education, Occupation and Career Expectations: Determinants of the Gender Pay Gap for UK Graduates," CEE Discussion Papers 0069, Centre for the Economics of Education, LSE.
  11. Astrid Kunze, 2008. "Gender wage gap studies: consistency and decomposition," Empirical Economics, Springer, vol. 35(1), pages 63-76, August.
  12. Polachek, Solomon William, 1981. "Occupational Self-Selection: A Human Capital Approach to Sex Differences in Occupational Structure," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 60-69, February.
  13. Paula England, 1982. "The Failure of Human Capital Theory to Explain Occupational Sex Segregation," Journal of Human Resources, University of Wisconsin Press, vol. 17(3), pages 358-370.
  14. Achatz, Juliane & Gartner, Hermann & Glück, Timea, 2004. "Bonus oder Bias? Mechanismen geschlechtsspezifischer Entlohnung," IAB Discussion Paper 200402, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  15. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 75-99, Fall.
  16. Beblo, Miriam & Wolf, Elke, 2002. "Wage Penalties for Career Interruptions: An Empirical Analysis for West Germany," ZEW Discussion Papers 02-45, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  17. Fitzenberger, Bernd & Kunze, Astrid, 2005. "Vocational Training and Gender: Wages and Occupational Mobility among Young Workers," IZA Discussion Papers 1766, Institute for the Study of Labor (IZA).
  18. Anne Busch & Elke Holst, 2008. "Verdienstdifferenzen zwischen Frauen und Männern nur teilweise durch Strukturmerkmale zu erklären," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 75(15), pages 184-190.
  19. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
  20. Arulampalam, Wiji & Booth, Alison L. & Bryan, Mark L., 2005. "Is there a glass ceiling over Europe? Exploring the gender pay gap across the wages distribution," ISER Working Paper Series 2005-25, Institute for Social and Economic Research.
  21. Elke Holst & Anne Busch, 2010. "Führungskräfte-Monitor 2010," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 56, number pbk56, March.
  22. Jane Waldfogel, 1998. "Understanding the "Family Gap" in Pay for Women with Children," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 137-156, Winter.
  23. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  24. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
  25. Elke Holst & Anita Wiemer, 2010. "Frauen in Spitzengremien großer Unternehmen weiterhin massiv unterrepräsentiert," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 77(4), pages 2-10.
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Cited by:
  1. Mendolicchio, Concetta & Rhein, Thomas, 2011. "The gender gap of returns on education across West European countries," IAB Discussion Paper 201120, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Anne Busch & Elke Holst, 2012. "Occupational Sex Segregation and Management-Level Wages in Germany: What Role Does Firm Size Play?," SOEPpapers on Multidisciplinary Panel Data Research 444, DIW Berlin, The German Socio-Economic Panel (SOEP).
  3. Franz, Nele, 2011. "Geschlechtsspezifische Verdienstunterschiede und Diskriminierung am Arbeitsmarkt: Eine Untersuchung unter Berücksichtigung von Voll- und Teilzeitarbeit," CIW Discussion Papers 11/2011, University of Münster, Center for Interdisciplinary Economics (CIW).

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