Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1169: Talent, Career Choice and Competition: The Gender Wage Gap at the Top

Fredrik Heyman (), Pehr-Johan Norbäck () and Lars Persson ()
Additional contact information
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)

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-codes: J70; L20; M50

Language: English

74 pages, First version: May 15, 2017. Revised: March 6, 2023. Earlier revisions: July 12, 2018.

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