Lower pay for women and their underrepresentation in leadership positions are seen at remarkably similar extents across countries.

Although women in many developed countries have education and jobs comparable to those of their male counterparts, earnings disparities between the genders are greater in wealthier countries, according to research by Associate Professor Mario Macis of the Johns Hopkins Carey Business School.

In a paper for IZA World of Labor, Macis examines the reasons for the persistence of wage and leadership gender gaps and their consequences. The paper also emphasizes the beneficial role that female leaders play in reducing gender inequality.

“Eliminating legal discrimination against women and promoting policies to counteract discrimination and cultural and social norms that, in many countries, have traditionally assigned women subordinate roles should be critical policy goals,” says Macis.

Gender wage gaps and women’s underrepresentation in leadership positions exist at remarkably similar magnitudes across countries at all levels of income per capita, Macis found. Women’s earnings are:
• 80 percent of men’s earnings in countries with a Gross Domestic Product per capita below $10,000.
• 82 percent of men’s earnings in countries with GDP per capita between $10,000 and $30,000.
• 76 percent of men’s earnings in countries with GDP per capita above $30,000.

Countries in the latter category include the United States, Canada, France, Germany, and Sweden, among others, according to 2015 data from the World Bank.

Women also remain underrepresented in leadership positions within institutions and organizations. Women hold only about 20 percent of parliamentary seats worldwide, and a survey of 100,000 private firms in 126 countries found only 29 percent of top managers to be women. (There is a roughly equal number of males and females in the world, World Bank statistics show.)

Research on the causes and consequences of gender gaps in leadership positions in organizations has grown in recent years.

Studies found a positive correlation between female leadership and firm performance, so the male-female leadership disparity reflects an inefficient allocation of talent, with negative consequences for growth, Macis says.

Moreover, interactions between female leaders and other women in firms were shown to contribute to greater gender equality and to have a positive effect on female promotion in the lower ranks.

Policies aimed at reducing gender disparities in education and labor market participation are important, particularly in developing countries. But further policy action is needed, Macis argues, as factors such as education, occupation, and industry explain only part of the gender gap. He shows that other factors are at play, including gender differences in psychological traits, socio-cultural norms and dynamics, and discrimination.

“This phenomenon raises issues of social justice and human rights, and might also lead to substantial economic costs to society if it results in an inefficient allocation of talent and distorts the incentives to invest in human capital.”

“This phenomenon raises issues of social justice and human rights, and might also lead to substantial economic costs to society if it results in an inefficient allocation of talent and distorts the incentives to invest in human capital.” “It is therefore worthwhile to identify and quantify the specific gender gaps that exist with respect to wages and leadership positions within institutions and organizations. Comparing these gaps as they exist in countries at all levels of income can provide insights into their causes and consequences, and can help us understand the link between the two phenomena.”

He adds, “It is also useful to examine how policy has so far been used to address these gaps, and how lessons from these experiences can be applied towards future policy recommendations.”

The paper, “Gender differences in wages and leadership,” appeared in January in IZA World of Labor, the publication of IZA, a Germany-based independent institute for economic research, where Macis is a research fellow.