The Double-Edged Sword of Female Political Leadership: Gender Diversity-Inducing and Gender Diversity-Reducing Effects in Organizations

Abstract

This study examines how the election of a top female political leader affects female employees and, consequently, the representation of women within organizations. We argue that the election of a top female political leader has two countervailing effects. On the one hand, having a top female political leader can increase the representation of women in higher-level positions in organizations, leading to a gender diversity-inducing effect. On the other hand, it can also generate a disproportionate outflow of women from wage employment into entrepreneurship, leading to a gender diversity-reducing effect. Finally, the strength of the two effects will depend on female employees’ qualification signals such as employment experience or educational attainment. Using data from the Korean Labor and Income Panel Study with an exogenous presidential election result from South Korea in 2012, we find broad support for our theory and hypotheses. We supplement our main empirical results with online experimental studies to provide further support for our theoretical mechanisms and to bolster the generalizability of our theory.

Keywords: Political leadership; career advancement; entrepreneurship; gender diversity, labor market