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

  • Nina Smith
  • Valdemar Smith
  • Mette Verne

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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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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  1. Jurajda, Stepán & Paligorova, Teodora, 2009. "Czech female managers and their wages," Labour Economics, Elsevier, vol. 16(3), pages 342-351, June.
  2. 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.
  3. 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.
  4. 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.
  5. Muriel Niederle & Lise Vesterlund, 2005. "Do Women Shy Away from Competition? Do Men Compete too Much?," Discussion Papers 04-030, Stanford Institute for Economic Policy Research.
  6. Alison L. Booth, 2009. "Gender and Competition," CEPR Discussion Papers 611, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  7. Marianne Bertrand & Kevin F. Hallock, 2000. "The Gender Gap in Top Corporate Jobs," NBER Working Papers 7931, National Bureau of Economic Research, Inc.
  8. Eriksson, T., 2001. "How Common Are The New Compensation and Work Organization Practices and Who Adopts Them?," Papers 01-8, Aarhus School of Business - Department of Economics.
  9. Edward P. Lazear & Sherwin Rosen, 1979. "Rank-Order Tournaments as Optimum Labor Contracts," NBER Working Papers 0401, National Bureau of Economic Research, Inc.
  10. Ana Rute Cardoso & Rudolf Winter-Ebmer, 2010. "Female-Led Firms and Gender Wage Policies," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 64(1), pages 143-163, October.
  11. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2003. "A sticky floors model of promotion, pay, and gender," European Economic Review, Elsevier, vol. 47(2), pages 295-322, April.
  12. 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.
  13. 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).
  14. Smith, Nina & Smith, Valdemar & Verner, Mette, 2005. "Do Women in Top Management Affect Firm Performance? A Panel Study of 2500 Danish Firms," IZA Discussion Papers 1708, Institute for the Study of Labor (IZA).
  15. 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).
  16. 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.
  17. 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.
  18. Lundberg, Shelly, 2005. "Men and islands: Dealing with the family in empirical labor economics," Labour Economics, Elsevier, vol. 12(4), pages 591-612, August.
  19. 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.
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