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Women-Led Firms and the Gender Gap in Top Executive Jobs

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  • Bell, Linda A.

    () (Haverford College)

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    Abstract

    Using data on Executive Compensation from Standard and Poor's ExecuComp, this paper explores the gender gap in top executive jobs and the effect of women CEOs, Chairs, and Directors on the pay of other women executives. The results show a narrowing of the uncorrected gender pay gap from the mid-1990s. Women top executives earn between 8% to 25% less than male executives after controlling for differences in company size, occupational title, and industry. The magnitude of the gender pay gap is statistically related to the gender of the Chief Executive and Corporate Board Chair. Women CEO and Board Chairs bring more top women and at higher pay than is found in non-women-led firms. Specifically, female executives in women-led firms earn between 10-20% more than comparable executive women in male-led firms and are between 3-18% more likely to be among the highest five paid executives in these firms as well. The paper thereby provides strong empirical evidence that women leaders are associated with positive outcomes for women executives in substantive and important ways.

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    File URL: http://ftp.iza.org/dp1689.pdf
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    Bibliographic Info

    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1689.

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    Length: 42 pages
    Date of creation: Jul 2005
    Date of revision:
    Handle: RePEc:iza:izadps:dp1689

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    Related research

    Keywords: executive compensation; gender discrimination; labor market institutions;

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    References

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    1. Susan Athey, 1998. "Mentoring and Diversity," Working papers 98-2, Massachusetts Institute of Technology (MIT), Department of Economics.
    2. Marianne Bertrand & Kevin F. Hallock, 2000. "The Gender Gap in Top Corporate Jobs," NBER Working Papers 7931, National Bureau of Economic Research, Inc.
    3. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," NBER Working Papers 7732, National Bureau of Economic Research, Inc.
    4. Lucian Bebchuk, 2005. "The Growth of Executive Pay," Oxford Review of Economic Policy, Oxford University Press, vol. 21(2), pages 283-303, Summer.
    5. Claudia Goldin, 2002. "A Pollution Theory of Discrimination: Male and Female Differences in Occupations and Earnings," NBER Working Papers 8985, National Bureau of Economic Research, Inc.
    6. Fuchs, Victor R, 1989. "Women's Quest for Economic Equality," Journal of Economic Perspectives, American Economic Association, vol. 3(1), pages 25-41, Winter.
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    Cited by:
    1. George-Levi Gayle & Limor Golan & Robert Miller, . "Are There Glass Ceilings for Female Executives?," GSIA Working Papers 2009-E8, Carnegie Mellon University, Tepper School of Business.
    2. Daunfeldt, Sven-Olov & Rudholm, Niklas, 2012. "Does Gender Diversity in the Boardroom Improve Firm Performance?," HUI Working Papers 60, HUI Research.
    3. Booth, Alison L., 2009. "Gender and Competition," CEPR Discussion Papers 7437, C.E.P.R. Discussion Papers.
    4. Gravelle, Hugh & Hole, Arne Risa & Santos, Rita, 2011. "Measuring and testing for gender discrimination in physician pay: English family doctors," Journal of Health Economics, Elsevier, vol. 30(4), pages 660-674, July.
    5. Stepan Jurajda & Teodora Paligorova, 2006. "Female Managers and Their Wages in Central Europe," CERGE-EI Working Papers wp296, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
    6. Elkinawy, Susan & Stater, Mark, 2011. "Gender differences in executive compensation: Variation with board gender composition and time," Journal of Economics and Business, Elsevier, vol. 63(1), pages 23-45, January.
    7. Hu, Ting & Yun, Myeong-Su, 2008. "Is the Glass Ceiling Cracking? A Simple Test," IZA Discussion Papers 3518, Institute for the Study of Labor (IZA).
    8. Cardoso, Ana Rute & Winter-Ebmer, Rudolf, 2007. "Mentoring and Segregation: Female-Led Firms and Gender Wage Policies," IZA Discussion Papers 3210, Institute for the Study of Labor (IZA).
    9. Jurajda, Stepan & Münich, Daniel, 2008. "Gender Gap in Performance under Competitive Pressure," CEPR Discussion Papers 7059, C.E.P.R. Discussion Papers.
    10. 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.
    11. Maria De Paola & Vincenzo Scoppa, 2011. "Gender Discrimination and Evaluators’ Gender: Evidence from the Italian Academy," Working Papers 201106, Università della Calabria, Dipartimento di Scienze Economiche, Statistiche e Finanziarie (Ex Dipartimento di Economia e Statistica).
    12. Jurajda, Stepán & Paligorova, Teodora, 2009. "Czech female managers and their wages," Labour Economics, Elsevier, vol. 16(3), pages 342-351, June.

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