Each issue of The Regional Economist, published by the Federal Reserve Bank of St. Louis, features the section “Ask an Economist,” in which one of the Bank’s economists answers a question. The answer below was provided by Economist Limor Golan.
While the facts listed below seem to indicate a gender differential in promotion and wages, they don't tell the whole story.
My co-authors, George-Levi Gayle and Robert Miller, and I analyzed a large database of companies and executives, along with the executives’ job histories and compensation and their firms’ financial performance.1
We found that, at any given level in their career, women executives are paid slightly more than men who have the same background and demographics and who are running firms of similar sizes. Controlling for these variables, women also have slightly less income uncertainty and are promoted as quickly. In fact, we found that the gender gaps in promotions and pay are primarily because female executives are more likely to leave their roles.
Since the women in executive roles are 50 years old on average, giving birth and caring for children are not plausible reasons for leaving. Other unobserved factors leading these women to quit could include more unpleasantness and indignities, as well as tougher unrewarding assignments, at work. Or it could be that these women find retirement an attractive option.
The reason for the higher attrition rate of females is not clear and deserves further study.
1 Gayle, George-Levi; Golan, Limor; and Miller, Robert A. “Gender Differences in Executive Compensation and Job Mobility.” Journal of Labor Economics, Vol. 30, No. 4, October 2012, pp. 829-71.
On the Economy
Get notified when new content is available on our On the Economy blog.
The On the Economy blog recently ranked in the top 20 on Feedspot’s list of top bank blogs.
About the Blog
The St. Louis Fed On the Economy blog features relevant commentary, analysis, research and data from our economists and other St. Louis Fed experts.
Views expressed are not necessarily those of the Federal Reserve Bank of St. Louis or of the Federal Reserve System.