Department of Economics and Business Economics

Valdemar Smith

The gender pay gap in top corporate jobs in Denmark - glass ceilings, sticky floors or both?

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

Purpose: This study analyses the gender pay gap among CEOs, VPs and potential top executives. We estimate how much of the gap which is explained by differences in individual characteristics and how much can be explained by firm characteristics and discriminatory processes.
Design/methodology/approach: The paper estimates compensation functions based on a panel of employer-employee data set covering all Danish companies in the private sector with more than 50 employees during the period 1996-2005. Alternative panel estimators are applied which takes into account unobserved time-invariant factors.
Findings: For VP and potential top executives, the estimated gap increased during the period 1996-2005 while for the small and selected group of CEOs, the corrected gender gap slightly decreased. Further, for this group we find that controlling for unobserved individual characteristics the estimated gender compensation gap is larger than the raw gender compensation gap. We interpret this result as an indication that the very few females who reach top positions in private firms are a highly selected sample who on average deviates from their male colleagues with respect to unobserved factors as motivation, ambitions, abilities etc.

Research limitations/implications: Our study does not claim to identify causal links between top executive compensation and individual or firm specific background characteristics.
Practical implications: , the extension of the family-friendly schemes may have had negative boomerang effects on the compensation and careers of all women, irrespective of whether they become mothers or not. Especially for those women aiming to reach the top of the organization, these effects may be important because potential career interruptions are expected to be more severe for this group.
Originality/value: This study adds to the limited empirical literature on the gender pay gap among the narrow group of top executives using a large panel employer-employee data set of all Danish companies. We document that when controlling for a large number of observable characteristics and time-invariant characteristics, the still exist a large gender compensation gap among top executives.
Original languageEnglish
JournalInternational Journal of Manpower
Pages (from-to)156-177
Number of pages22
Publication statusPublished - 2011

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