Female-Led Firms and Gender Wage Policies

Authors: Ana Rute Cardoso and Rudolf Winter-Ebmer

Industrial and Labor Relations Review, Vol. 64, No 1, 143--163, January, 2010

Using a longitudinal data set covering the period 1987-2000, the authors explore the impact of female employers and gender segregation on wages in Portugal. In the context of Becker's (1957) taste for discrimination theory, they investigate whether the gender of a firm manager affects gender wage differences. They find that females benefit from higher wages in female-led firms than in male-led firms. Further, when females lead, the wage gap between female and male workers is reduced by 1.5%, regardless of the gender composition of the workforce. At the same time, the higher the share of females in a firm, the lower the wages overall for both female and male workers. The authors' results are compatible with the notion that job promotion is an important factor in wage increases. The more females are mentored and promoted, the less men will be. However, as more females in the firm compete for promotion, opportunities for both females and males to be promoted diminish.