Gender gaps and the role of female bosses: evidence from matched employer-employee administrative data

While a large body of literature has focused on identifying the causes of female under-representation at hierarchical positions, we still know little about the effects of having more women with decision-making power at top positions. Using matched employer-employee administrative data for Uruguay, this paper investigates how the gender composition at hierarchical positions of the firms affects the wage gaps among male and female employees. Our results show that having a higher proportion of female bosses at the firms leads to lower pay gaps. Including workers’ and bosses’ fixed effects to account for unobserved heterogeneity, we find that working in a firm with increasing participation of female bosses reduces the gender pay gap by between 1.15 and 4.27 log points. The gender pay gaps are substantially lower among civil servants compared to those of private workers, but even in these large public firms having female bosses reduces the gender wage gaps. We present suggestive evidence that gender differences in the entrance wage offered to males compared to that offered to female workers partially explain these results. Moreover, women working in public firms are between 2.9% and 4.3% more likely to be promoted when working for female bosses.