Pursuing equal pay for equal work: Gender diversity in management positions and the gender pay gap throughout the wage distribution

Summary

Despite significant female labor market participation, achieving equal pay for equal work remains a challenge, with women often experiencing poorer labor conditions, including lower wages and limited decision-making roles. This research paper, "Pursuing equal pay for equal work: Gender diversity in management positions and the gender pay gap throughout the wage distribution" by Santero-Sánchez and Núñez, published in 2025, investigates the influence of gender diversity within management on the gender wage gap (GWG) across the entire wage distribution in Spain. The study employs a methodology that utilizes quantile regressions to analyze wage gaps throughout the earning distribution, which offers practical advantages over traditional techniques. This approach is more effective in revealing specific pay gap patterns, such as "glass ceiling" (higher gaps at top percentiles) and "sticky floor" (higher gaps at bottom percentiles) effects, and is less susceptible to atypical values. The authors combine two distinct measures of diversity: the traditional female representation in management and the gender-neutral Blau diversity index, providing a comprehensive view of diversity's impact. The findings indicate a persistent gender wage gap in Spain, particularly pronounced at wages below the average, which aligns with the "sticky floor" phenomenon. Crucially, the study reveals that an increased participation of women in management positions is associated with a reduction in the gender wage gap. This reduction is attributed to the alleviation of information asymmetry problems, as theorized in statistical discrimination, and a decrease in gender bias during evaluation processes. A higher presence of women in management is theorized to lead to a more accurate perception of female workers' performance, thereby mitigating salary discrimination. Furthermore, the research suggests that a more gender-equal management primarily reduces the GWG in the middle and lower segments of the wage distribution. These results support the idea that gender diversity in leadership roles contributes to diminishing barriers in career progression for women. The implications of this research are significant for policymakers, firms, and regulators aiming to achieve pay equity. The study underscores the importance of actively managing leadership gender diversity to foster equitable pay practices. It suggests that regulatory bodies should continue to promote and potentially mandate good governance practices that enhance transparency and legitimacy within companies, leading to more equitable remuneration. Specifically, the findings advocate for the implementation of transparency policies and laws to closely monitor variable remuneration, as the GWG tends to be higher in these components, and to develop fairer compensation systems. Promoting policies that explicitly address and avoid remuneration inequality in the design of compensation structures for all levels, including boards of directors, is also recommended.