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More women in managerial roles could close the Gender Wage Gap, IOE research shows

28 October 2019

The Gender Wage Gap narrows through having more women in managerial positions, new research by UCL Institute of Education (IOE) shows.

Women and men talking in a workplace meeting room

In 2017 the raw gender wage gap in median hourly pay was 18.4 per cent, however, Professor Alex Bryson (IOE’s Department of Social Science), John Forth (City University) and Nikos Theodoropoulos (University of Cyprus) have found that the Gender Wage Gap declines substantially with the increasing share of female managers in the workplace. This is because women’s wages rise with the share of female managers in the workplace while men’s wages fall. The research suggests the share of female managers in the workplace has a causal impact in reducing the wage gap.

The researchers used data from 3,236 workplaces and 39,966 of their employees, collected in the Workplace Employment Relations Surveys of 2004 and 2011.

The new discussion paper showed the role of female managers in closing the Gender Wage Gap is more pronounced when employees are paid for performance. This suggests that women are more likely to be paid equitably when managers have discretion in the way they reward performance and those managers are women.

The paper finds that among workers paid for performance the convergence in the Gender Wage Gap is achieved when the share of female managers is about 40 percent. It begins to flip in women’s favour when the share of female managers is about 60 percent – although this gap in favour of women does not reach statistical significance. For workers on fixed pay contracts the closure of the wage gap is not so striking. It is eliminated when the share of female managers is around 50%, but a gap in favour of women does not emerge beyond this threshold.   

The researchers discovered that the gender pay gap is no longer statistically significant when 90 percent of workplace managers are women, a scenario that obtains in 12 percent of workplaces.

Professor Bryson said: “These findings are consistent with earlier studies indicating women in managerial positions can close the Gender Wage Gap by facilitating women’s career progression and by tackling discriminatory practices. However, it is notable that much of the decline in the Gender Wage Gap with the increase in female managers arises due to a worsening in men’s positions, not only in relative but also in absolute terms. This is worthy of further investigation, but may be due to a reallocation of limited resources from men to women when the share female managers rises.”

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