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Glass Ceiling Effect and Earnings: The Gender Pay Gap in Managerial Positions in Germany

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  • Anne Busch
  • Elke Holst

Abstract

Although there are a variety of studies on the gender pay gap, only a few relate to managerial positions. The present study attempts to fill this gap. Managers in private companies in Germany are a highly selective group of women and men, who differ only marginally in their human capital endowments. The Oaxaca/Blinder decomposition shows that the gender pay gap in the gross monthly salary can hardly be explained using the human capital approach. Adding variables on gender-specific labor market segregation and dimensions of the household and family to the model allows more than two-thirds of the gender pay gap to be explained. However, taking selection effects in a managerial position into account (Heckman correction), the proportion explained decreases to only one-third. This reveals the real extent to which women are disadvantaged on the labor market. In addition, we observe not only that the wages in typical women's jobs are lower than in typical men's jobs but also that women are paid less than men in typical women's jobs. The two-thirds of the gender pay gap that remain unexplained represent the unobserved heterogeneity. This includes, for example, general societal and cultural conditions as well as structures and practices on the labor market and in companies that subject women to pay discrimination and pose an obstacle to them breaking the glass ceiling.

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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 905.

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Length: 35 p.
Date of creation: 2009
Date of revision:
Handle: RePEc:diw:diwwpp:dp905

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Keywords: Gender pay gap; managerial positions; segregation; Oaxaca/Blinder decomposition; Heckman correction;

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References

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Citations

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Cited by:
  1. Anne Busch & Elke Holst, 2011. "Gender-Specific Occupational Segregation, Glass Ceiling Effects, and Earnings in Managerial Positions: Results of a Fixed Effects Model," SOEPpapers on Multidisciplinary Panel Data Research 357, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Smith, Nina & Smith, Valdemar & Verner, Mette, 2010. "The Gender Pay Gap in Top Corporate Jobs in Denmark: Glass Ceilings, Sticky Floors or Both?," IZA Discussion Papers 4848, Institute for the Study of Labor (IZA).
  3. Anna Ruzik & Magdalena Rokicka, 2010. "The Gender Pay Gap in Informal Employment in Poland," CASE Network Studies and Analyses 406, CASE-Center for Social and Economic Research.
  4. Trzcinski, Eileen & Holst, Elke, 2011. "A Critique and Reframing of Personality in Labour Market Theory: Locus of Control and Labour Market Outcomes," IZA Discussion Papers 6090, Institute for the Study of Labor (IZA).
  5. Eileen Trzcinski & Elke Holst, 2010. "Interrelationships among Locus of Control and Years in Management and Unemployment: Differences by Gender," SOEPpapers on Multidisciplinary Panel Data Research 266, DIW Berlin, The German Socio-Economic Panel (SOEP).

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