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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.

Suggested Citation

  • 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.
  • Handle: RePEc:diw:diwwpp:dp905
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    References listed on IDEAS

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    1. repec:eee:poleco:v:49:y:2017:i:c:p:24-46 is not listed on IDEAS
    2. Busch, Anne & Holst, Elke, 2011. "Gender-Specific Occupational Segregation, Glass Ceiling Effects, and Earnings in Managerial Positions: Results of a Fixed Effects Model," IZA Discussion Papers 5448, Institute for the Study of Labor (IZA).
    3. Eileen Trzcinski & Elke Holst, 2012. "Gender Differences in Subjective Well-Being In and Out of Management Positions," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 107(3), pages 449-463, July.
    4. Magdalena Smyk & Joanna Tyrowicz & Barbara Liberda, 2014. "Age-productivity patterns in talent occupations for men and women: a decomposition," Post-Communist Economies, Taylor & Francis Journals, vol. 26(3), pages 401-414, September.
    5. Bozzano, Monica, 2017. "On the historical roots of women's empowerment across Italian provinces: religion or family culture?," European Journal of Political Economy, Elsevier, vol. 49(C), pages 24-46.
    6. Matthias Collischon, 2017. "Is there a Glass Ceiling over Germany?," Working Papers 175, Bavarian Graduate Program in Economics (BGPE).
    7. Nina Smith & Valdemar Smith & Mette Verne, 2011. "The gender pay gap in top corporate jobs in Denmark: Glass ceilings, sticky floors or both?," International Journal of Manpower, Emerald Group Publishing, vol. 32(2), pages 156-177, May.
    8. Marco Biagetti & Sergio Scicchitano, 2016. "Are women in supervisory positions more discriminated against? A multinomial approach," Working Papers 2, Department of the Treasury, Ministry of the Economy and of Finance.
    9. 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.
    10. Joanna Tyrowicz & Lucas van der Velde & Irene van Staveren, 2017. "Identifying Age Penalty in Women's Wages: New Method and Evidence from Germany 1984-2014," SOEPpapers on Multidisciplinary Panel Data Research 956, DIW Berlin, The German Socio-Economic Panel (SOEP).
    11. Joanna Tyrowicz & Lucas van der Velde & Irene van Staveren, 2018. "Identifying Age Penalty in Women's Wages: New Method and Evidence from Germany 1984-2014," IAAEU Discussion Papers 201803, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    12. Eileen Trzcinski & Elke Holst, 2011. "A Critique and Reframing of Personality in Labour Market Theory: Locus of Control and Labour Market Outcomes," SOEPpapers on Multidisciplinary Panel Data Research 403, DIW Berlin, The German Socio-Economic Panel (SOEP).
    13. Joanna Tyrowicz & Lucas van der Velde & Irene van Staveren, 2015. "Differences in the Estimates of Gender Wage Gap Over The Life Cycle," Working Papers 2015-29, Faculty of Economic Sciences, University of Warsaw.
    14. 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).

    More about this item

    Keywords

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

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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