Talent, Career Choice and Competition: The Gender Wage Gap at the Top

60 Pages Posted: 5 Nov 2020

See all articles by Fredrik Heyman

Fredrik Heyman

Research Institute of Industrial Economics (IFN)

Pehr-Johan Norbäck

Research Institute of Industrial Economics (IFN)

Lars Persson

Research Institute of Industrial Economics (IFN); Centre for Economic Policy Research (CEPR)

Date Written: 2020

Abstract

We propose a management career model where females face a gender-specific career hurdle. We show that female managers will, on average, be more skilled than male managers, since females from the low end of the talent distribution will abstain from investing in a career as a manager. The average female manager will then be better at mitigating more intense product market competition. When the intensity of product market competition increases, hirings and wages for female managers will therefore increase relative to those of male managers. Using Swedish matched employer-employee data, we find strong empirical evidence for all these predictions.

Keywords: career, gender wage-gap, job inflexibility, management, competition

JEL Classification: J700, L200, M500

Suggested Citation

Heyman, Fredrik and Norbäck, Pehr-Johan and Persson, Lars, Talent, Career Choice and Competition: The Gender Wage Gap at the Top (2020). CESifo Working Paper No. 8657, Available at SSRN: https://ssrn.com/abstract=3725296

Fredrik Heyman (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

HOME PAGE: http://https://www.ifn.se/eng/people/research-faculty/fredrikh_1

Pehr-Johan Norbäck

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Lars Persson

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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