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

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  • Boris Hirsch

    (Friedrich-Alexander-University Erlangen-Nürnberg)

  • Steffen Mueller

    (Friedrich-Alexander-University Erlangen-Nürnberg)

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.

Suggested Citation

  • Boris Hirsch & Steffen Mueller, 2014. "Firm leadership and the gender pay gap: do active owners discriminate more than hired managers?," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 47(1), pages 129-142, March.
    • Handle: RePEc:spr:jlabrs:v:47:y:2014:i:1:d:10.1007_s12651-013-0138-x
    DOI: 10.1007/s12651-013-0138-x
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    Cited by:

    1. Hirsch, Boris & Schnabel, Claus, 2011. "Let's take bargaining models seriously: The decline in union power in Germany, 1992 - 2009," FAU Discussion Papers in Economics 10/2011, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.

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    More about this item

    Keywords

    Gender pay gap; Firm leadership; Discrimination; Germany;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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