Can Startups Disrupt the Gender Pay Gap? Disruption of Economic Exclusion A Two-Tiered Approach

Entrepreneurial disruption may mitigate the gender pay gap. Recent research mapping the gender pay gap?s details demonstrate the pay-gap?s persistence, as well as its nuanced details at the industry-level. While women in the EU earn substantially less per-hour than men, EU-level data indicate that at sectoral level, there is extreme gender pay gap heterogeneity across EU and EEA member-nations. This is particularly concentrated in industries such as finance, characterized by highly concentrated market-structures, and large, well-established firms. With startups and venture capital investment emerging as key topics-of-interest in business ecosystems, research has surfaced concerning significant gender gaps in both startup selection and valuation, as well as founder gender balances. Using an original EU and EEA venture-capital investments database, and a two-tiered empirical approach relying on both OLS and machine-learning techniques, this study examines the impact of valuations and entrepreneurial concentration on the sector level gender pay gap in the EU. Findings indicate that fact it is the emergence of high-valuation startups able to disrupt sector-level market-structure are able to mitigate the gender pay gap and reduce industry-level insider holdings, which proxy economic exclusion in-general. This study contributes to understanding of the role startup disruption plays in mitigating gender-based economic exclusion.