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The Gender Pay Gap in Top Corporate Jobs in Denmark: Glass Ceilings, Sticky Floors or Both?

Author

Listed:
  • Smith, Nina

    () (Aarhus University)

  • Smith, Valdemar

    () (Aarhus School of Business)

  • Verner, Mette

    () (Danish School of Media and Journalism)

Abstract

This paper analyses the gender gap in compensation for CEOs, Vice-Directors, and potential top executives in the 2000 largest Danish private companies based on a panel data set of employer-employees data covering the period 1996-2005. During the period, the overall gender gap in compensation for top executives and potential top executives decreased from 35 percent to 31 percent. However, contrary to many other studies, we do not find that the gender gap for Danish top executives disappears when controlling for observed individual and firm characteristics and unobserved individual heterogeneity. For CEOs, the raw compensation gap is 28 percent during the period while the estimated compensation gap after controlling for observed and unobserved characteristics increases to 30 percent. For executives below the CEO level, the estimated compensation gap is lower, ranging from 15 to 20 percent. Thus, we find evidence of both glass ceilings and sticky floors in Danish private firms.

Suggested Citation

  • 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).
  • Handle: RePEc:iza:izadps:dp4848
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    References listed on IDEAS

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    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. 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.
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    6. Nabanita Datta Gupta & Nina Smith & Leslie S. Stratton, 2007. "Is Marriage Poisonous? Are Relationships Taxing? An Analysis of the Male Marital Wage Differential in Denmark," Southern Economic Journal, Southern Economic Association, vol. 74(2), pages 412-433, October.
    7. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 1067-1101.
    8. 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.
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    11. 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.
    12. 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.
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    16. 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.
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    Cited by:

    1. Kunze, Astrid, 2013. "Gender differences in career progression: Does the effect of children capture low work effort?," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79705, Verein für Socialpolitik / German Economic Association.
    2. 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.
    3. Merlino L.P. & Parrotta P. & Pozzoli D., 2014. "Gender differences in sorting," Research Memorandum 022, Maastricht University, Graduate School of Business and Economics (GSBE).
    4. Frederiksen, Anders & Kato, Takao, 2011. "Human Capital and Career Success: Evidence from Linked Employer-Employee Data," IZA Discussion Papers 5764, Institute for the Study of Labor (IZA).
    5. Mohan, Nancy, 2014. "A review of the gender effect on pay, corporate performance and entry into top management," International Review of Economics & Finance, Elsevier, vol. 34(C), pages 41-51.
    6. Marco Biagetti & Sergio Scicchitano, 2011. "A note on the gender wage gap among managerial positions using a counterfactual decomposition approach: sticky floor or glass ceiling?," Applied Economics Letters, Taylor & Francis Journals, vol. 18(10), pages 939-943.
    7. repec:bla:acctfi:v:57:y:2017:i:3:p:789-813 is not listed on IDEAS
    8. Smith, Nina & Smith, Valdemar & Verner, Mette, 2011. "Why Are So Few Females Promoted into CEO and Vice-President Positions? Danish Empirical Evidence 1997-2007," IZA Discussion Papers 5961, Institute for the Study of Labor (IZA).
    9. Sergio Scicchitano, 2015. "Exploring the gender wage gap in the managerial labour market:a counterfactual decomposition analysis," Working Papers 2, Department of the Treasury, Ministry of the Economy and of Finance.
    10. Lam, Kevin C.K. & McGuinness, Paul B. & Vieito, João Paulo, 2013. "CEO gender, executive compensation and firm performance in Chinese‐listed enterprises," Pacific-Basin Finance Journal, Elsevier, vol. 21(1), pages 1136-1159.
    11. Luca Paolo Merlino & Pierpaolo Parrotta & Dario Pozzoli, 2012. "Assortative Matching Gender," Working Papers ECARES ECARES 2012-040, ULB -- Universite Libre de Bruxelles.

    More about this item

    Keywords

    CEO compensation; glass ceiling; gender gap;

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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