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Firm Leadership And The Gender Pay Gap: Do Active Owners Discriminate More Than Hired Managers?

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Executive Summary

Using a large linked employer-employee data set for Germany, the authors investigate differences in the unexplained gender pay gap between owner-run and manager-run rms. They hypothesise that owner-run firms have higher pay gaps because active owners are less inhibited to live out pro t-reducing discriminatory preferences against women than hired managers. They indeed find that the pay gaps are significantly higher in owner-run plants, both statistically and economically. Yet, scrutinising these results by restricting the analysis to plants that only differ in leadership regime, this substantial difference disappears. Therefore, the findings do not support that active owners are more discriminatory per se.

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