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Firm leadership and the gender pay gap: do active owners discriminate more than hired managers?

Firm leadership and the gender pay gap: do active owners discriminate more than hired managers? Using a large linked employer–employee data set for Germany, we investigate differences in the unexplained gender pay gap between owner-run and manager-run firms. We hypothesise that owner-managers and hired managers differ in their discretion to engage in profit-reducing taste discrimination against women, which would translate into different pay gaps depending on leadership regime. We find that unexplained gaps are significantly higher in owner-run firms, both statistically and economically. Yet, scrutinising these results by restricting our analysis to firms that only differ in leadership regime, this substantial difference disappears. Therefore, our findings do not support that active owners are more discriminatory per se. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal for Labour Market Research Springer Journals

Firm leadership and the gender pay gap: do active owners discriminate more than hired managers?

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References (34)

Publisher
Springer Journals
Copyright
Copyright © 2013 by Institut für Arbeitsmarkt- und Berufsforschung
Subject
Economics / Management Science; Labor Economics; Sociology, general; Human Resource Management; Economic Policy; Regional/Spatial Science; Population Economics
ISSN
1614-3485
eISSN
1867-8343
DOI
10.1007/s12651-013-0138-x
Publisher site
See Article on Publisher Site

Abstract

Using a large linked employer–employee data set for Germany, we investigate differences in the unexplained gender pay gap between owner-run and manager-run firms. We hypothesise that owner-managers and hired managers differ in their discretion to engage in profit-reducing taste discrimination against women, which would translate into different pay gaps depending on leadership regime. We find that unexplained gaps are significantly higher in owner-run firms, both statistically and economically. Yet, scrutinising these results by restricting our analysis to firms that only differ in leadership regime, this substantial difference disappears. Therefore, our findings do not support that active owners are more discriminatory per se.

Journal

Journal for Labour Market Research – Springer Journals

Published: Jul 30, 2013

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