Mechanisms of Inequality. Unequal Access to Organizational Power and the Gender Wage Gap

Abstract

In this paper, it is argued that women's limited access to organizational power structures is a constituent part of the explanation of gender wage inequality. Multi-level analyses conducted on a comprehensive Swedish data set combining information on a large number of private sector employers and all their employees confirm that establishments' gender wage gaps are wider the stronger the male representation among organizational decision-makers, net of individuals' human capital and various organizational features relevant for wage setting. Theoretical explanations focus on gender unequal outcomes of i) general rules and policies decided at higher organizational levels, and ii) everyday decision-making and daily interaction between superiors and their subordinates. On basis of the empirical results, we conclude that gender wage inequality is to a substantial degree driven by everyday decision-making in organizations. It seems as if close supervisors' decisions and suggestions about wage rates, promotions, internal training et cetera are to some extent based on personal preferences, l oyalties, and contacts that are not gender neutral.

The Effect of Female Managers on Gender Wage Differences

“…The difference between the male and female headed departments showed a tendency to decrease with the higher proportion of women in the departments. Szulkin (1999 and2003), Cohen and Huffman (2007) and the study by Cardoso and Winter-Ebmer (2010) concluded that the gender wage gap reduced with a greater representation of women in management. Our fi ndings are consistent with these.…”

“…This could be explained by more freedom in determining wages in the private sector where wages are not subject to wage regulations. In the study by Hultin and Szulkin (2003), the authors used a signifi cantly broader sample of employees. They used an employer-employee matched data set covering a large number of Swedish private sector fi rms.…”

“…Unlike Hultin and Szulkin (2003) and Cohen and Huffman (2007) we do not use as the explanatory variable the gender composition of managers but a dummy for the gender of the head of the department where the employee works. This approach matches the employee and the manager and allows to take into account the gender of the manager having a direct impact on the wage level.…”

“…Under this theory, women in managerial positions, that can affect the wage of their subordinates, are likely to evaluate female employees better than male employees. The vast majority of empirical studies confi rms the negative impact of the higher proportion of men in the management on the female wage Szulkin, 1999 and2003;Cohen and Huffman, 2007;Cardoso and Winter-Ebmer, 2010). And it is exactly this issue to which the following study is devoted.…”

Seeking Similarity: How Immigrants and Natives Manage in the Labor Market

“…Although 7.2 percent of the hires in our data are non-western migrants, only 3.7 percent of the managers come from this group. 7 A closely related literature studies managers from a gender perspective and shows a positive correlation between female management and female wages (Carrington and Troske 1995;Hultin and Szulkin 2003). Using a matched employer-employee dataset for Portugal, Carduso and Winter-Ebmer (2007) estimate the effect of withinestablishment manager changes and find that female-led firms pay a premium to female workers of almost 5 percent.…”