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Gender-Specific Occupational Segregation, Glass Ceiling Effects, and Earnings in Managerial Positions: Results of a Fixed Effects Model

  • Busch, Anne

    ()

    (DIW Berlin)

  • Holst, Elke

    ()

    (DIW Berlin)

The study analyses the gender pay gap in private-sector management positions based on the German Socio-Economic Panel Study (SOEP) for the years 2001-2008. It focuses on occupational gender segregation, and on the effects of this inequality on earnings levels and gender wage differentials in management positions. Our paper is, to our knowledge, the first in Germany to use time-constant unobserved heterogeneity and gender-specific promotion probabilities to estimate wages and wage differentials for persons in managerial positions. The results of the fixed-effects model show that working in a more "female" job, as opposed to a more "male" job, affects only women's wages negatively. This result remains stable after controlling for human capital endowments and other effects. Mechanisms of the devaluation of jobs not primarily held by men also negatively affect pay in management positions (evaluative discrimination) and are even more severe for women (allocative discrimination). However, the effect is non-linear; the wage penalties for women occur only in "integrated" (more equally male/female) jobs as opposed to typically male jobs, and not in typically female jobs. The devaluation of occupations that are not primarily held by men becomes even more evident when promotion probabilities are taken into account. An Oaxaca/Blinder decomposition of the wage differential between men and women in management positions shows that the full model explains 65 percent of the gender pay gap. In other words: Thirty-five percent remain unexplained; this portion reflects, for example, time-varying social and cultural conditions, such as discriminatory policies and practices in the labor market.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5448.

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Length: 27 pages
Date of creation: Jan 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5448
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  1. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  2. Astrid Kunze, 2008. "Gender wage gap studies: consistency and decomposition," Empirical Economics, Springer, vol. 35(1), pages 63-76, August.
  3. Polachek, Solomon William, 1981. "Occupational Self-Selection: A Human Capital Approach to Sex Differences in Occupational Structure," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 60-69, February.
  4. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 75-99, Fall.
  5. Arnaud Chevalier, 2007. "Education, Occupation and Career Expectations: Determinants of the Gender Pay Gap for UK Graduates," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(6), pages 819-842, December.
  6. Arulampalam, Wiji & Booth, Alison L. & Bryan, Mark L., 2005. "Is there a glass ceiling over Europe? Exploring the gender pay gap across the wages distribution," ISER Working Paper Series 2005-25, Institute for Social and Economic Research.
  7. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP): Scope, Evolution and Enhancements," SOEPpapers on Multidisciplinary Panel Data Research 1, DIW Berlin, The German Socio-Economic Panel (SOEP).
  8. Jane Waldfogel, 1998. "Understanding the "Family Gap" in Pay for Women with Children," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 137-156, Winter.
  9. Francine D. Blau & Lawrence M. Kahn, 2001. "Understanding International Differences in the Gender Pay Gap," NBER Working Papers 8200, National Bureau of Economic Research, Inc.
  10. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  11. Simon Fietze & Elke Holst & Verena Tobsch, 2009. "Personality and Career: She's Got What It Takes," Discussion Papers of DIW Berlin 955, DIW Berlin, German Institute for Economic Research.
  12. Lausten, Mette, 2001. "Gender Differences in Managerial Compensation - Evidences from Denmark," Working Papers 01-4, University of Aarhus, Aarhus School of Business, Department of Economics.
  13. Anne Busch & Elke Holst, 2008. "Verdienstdifferenzen zwischen Frauen und Männern nur teilweise durch Strukturmerkmale zu erklären," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 75(15), pages 184-190.
  14. repec:ilo:ilowps:344117 is not listed on IDEAS
  15. Beblo, Miriam & Wolf, Elke, 2002. "Wage Penalties for Career Interruptions: An Empirical Analysis for West Germany," ZEW Discussion Papers 02-45, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  16. 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.
  17. Bernd Fitzenberger & Astrid Kunze, 2005. "Vocational Training and Gender: Wages and Occupational Mobility among Young Workers," Oxford Review of Economic Policy, Oxford University Press, vol. 21(3), pages 392-415, Autumn.
  18. Paula England, 1982. "The Failure of Human Capital Theory to Explain Occupational Sex Segregation," Journal of Human Resources, University of Wisconsin Press, vol. 17(3), pages 358-370.
  19. Elke Holst & Anita Wiemer, 2010. "Frauen sind in Spitzengremien der Wirtschaft unterrepräsentiert," Wirtschaftsdienst, Springer, vol. 90(10), pages 692-699, October.
  20. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
  21. Elke Holst & Anne Busch, 2010. "Führungskräfte-Monitor 2010," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 56, number pbk56.
  22. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  23. Achatz, Juliane & Gartner, Hermann & Glück, Timea, 2004. "Bonus oder Bias? Mechanismen geschlechtsspezifischer Entlohnung," IAB Discussion Paper 200402, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  24. Ben Jann, 2008. "The Blinder–Oaxaca decomposition for linear regression models," Stata Journal, StataCorp LP, vol. 8(4), pages 453-479, December.
  25. Elke Holst & Anita Wiemer, 2010. "Frauen in Spitzengremien großer Unternehmen weiterhin massiv unterrepräsentiert," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 77(4), pages 2-10.
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