Are Women Doing It for Themselves? Female Managers and the Gender Wage Gap*

Abstract

Using linked employer-employee data for Britain, we find a robust association between the share of female managers in the workplace and the size of the gender wage gap. In workplace fixed-effects estimates, the gap is eradicated when more than 60% of workplace managers are women, a scenario that obtains in around one fifth of all workplaces. The association between the share of female managers and the gender wage gap is more pronounced when workplace managers set pay at the workplace, and where employees are paid for performance. These findings are consistent with the proposition that women are more likely to be paid equitably when managers have discretion in the way they set pay or reward performance and those managers are women. They suggest that a stronger presence of women in managerial positions can help tackle the gender wage gap.

The role of the workplace in ethnic wage differentials

“…For example, using the same series of WERS surveys that we use in this article, Mumford and Smith (2007) and Theodoropoulos et al. (2022) show that workplace segregation and within‐workplace wage differentials are a key source of disadvantage for women. However, no prior studies have examined the relative importance of inter‐workplace segregation and intra‐workplace differences in wage‐setting when seeking to understand ethnic wage gaps in Britain.…”

“…6 We know from existing studies for Britain that the workplace plays an important role in explaining wage gaps across other groups, such as men and women. For example, using the same series of WERS surveys that we use in this article, Mumford and Smith (2007) and Theodoropoulos et al (2022) show that workplace segregation and within-workplace wage differentials are a key source of disadvantage for women. However, no prior studies have examined the relative importance of inter-workplace segregation and intra-workplace differences in wage-setting when seeking to understand ethnic wage gaps in Britain.…”

“…16 We thereby focus specifically on ethnicity, abstaining from a detailed consideration of patterns of gender segregation. As noted earlier, patterns of gender segregation have been explored elsewhere (Mumford and Smith, 2007;Theodoropoulos et al, 2022). 17 These controls are the share of employees who are trade union members, the share of employees aged 50 or over and the share of employees aged between 18 and 21 years.…”

Placing context in longitudinal research

“…We can look into the relationship between segregation and pay more closely using another data set: the linked employer-employee records from the Workplace Employment Relations Survey. Theodoropoulos et al (2022) have shown the presence of female managers reduces, if not eliminates, the pay penalty to females in feminised workplaces. This is particularly true where the female managers have a direct role in setting payments.…”

The Ongoing Impact of Gender Pay Gap Transparency Legislation

“…In column (1) we explore the average percentage of the workforce who are female and in column (2) the percentage of females in the highest pay quartile is used as a proxy for female influence (Theodoropoulos et al, 2022). We find that the narrowing impact of reporting on the GPG is reduced in organisations with a larger proportion of females (column (1)) and greater female representation in the upper quartile prior to the suspension of the scheme (column (2)).…”