Women in Hierarchies

By Patrick L. Warren

In celebration of International Women's Day, I went looking for recent papers that examined the role of women in organizations. I learned a lot, and wanted to share some of the papers I found with our members, separated into two broad themes: the effects of exposure to female leaders on beliefs about the quality of female leaders, and the direct effect of those leaders on organizational outcomes.

  • Exposure to women and and beliefs about quality.

Powerful Women: Does Exposure Reduce Bias? (paper) (ungated)
Lori Beaman, Raghabendra Chattopadhyay, Esther Duflo, Rohini Pande and Petia Topalova

We exploit random assignment of gender quotas for leadership positions on Indian village councils to show that prior exposure to a female leader is associated with electoral gains for women. After ten years of quotas, women are more likely to stand for, and win, elected positions in councils required to have a female chief councilor in the previous two elections. We provide experimental and survey evidence on one channel of influence—changes in voter attitudes. Prior exposure to a female chief councilor improves perceptions of female leader effectiveness and weakens stereotypes about gender roles in the public and domestic spheres.

Exposure to female colleagues breaks the glass ceiling—Evidence from a combined vignette and field experiment (paper) (ungated)

Henning Finseraasa, Åshild A. Johnsenb, Andreas Kotsadamc, Gaute Torsvikd

We study discrimination among recruits in the Norwegian Armed Forces during boot camp. In a vignette experiment female candidates are perceived as less suited to be squad leaders than their identical male counterparts. Adding positive information leads to higher evaluations of the candidates, but does not reduce the amount of discrimination. However, randomized intense collaborative exposure to female colleagues reduces discriminatory attitudes: Male soldiers who were randomly assigned to share room and work in a squad with female soldiers during the recruit period do not discriminate in the vignette experiment.


  • Effects of Mandated Female Participation on Organizational Outcomes

Breaking the Glass Ceiling? The Effect of Board Quotas on Female Labor Market Outcomes in Norway (NBER) (ungated)

Marianne Bertrand, Sandra E. Black, Sissel Jensen, Adriana Lleras-Muney

In late 2003, Norway passed a law mandating 40 percent representation of each gender on the board of publicly limited liability companies. The primary objective of this reform was to increase the representation of women in top positions in the corporate sector and decrease gender disparity in earnings within that sector. We document that the newly (post-reform) appointed female board members were observably more qualified than their female predecessors, and that the gender gap in earnings within boards fell substantially. While the reform may have improved the representation of female employees at the very top of the earnings distribution (top 5 highest earners) within firms that were mandated to increase female participation on their board, there is no evidence that these gains at the very top trickled-down. Moreover the reform had no obvious impact on highly qualified women whose qualifications mirror those of board members but who were not appointed to boards. We observe no statistically significant change in the gender wage gaps or in female representation in top positions, although standard errors are large enough that we cannot rule economically meaningful gains. Finally, there is little evidence that the reform affected the decisions of women more generally; it was not accompanied by any change in female enrollment in business education programs, or a convergence in earnings trajectories between recent male and female graduates of such programs. While young women preparing for a career in business report being aware of the reform and expect their earnings and promotion chances to benefit from it, the reform did not affect their fertility and marital plans. Overall, in the short run the reform had very little discernible impact on women in business beyond its direct effect on the newly appointed female board members.

A Female Style in Corporate Leadership? Evidence from Quotas (paper) (ungated)

David A. Matsa, Amalia R. Miller

This paper studies the impact of gender quotas for corporate board seats on corporate decisions. We examine the introduction of Norway’s 2006 quota, comparing affected firms to other Nordic companies, public and private, that were unaffected by the rule. We find that affected firms undertook fewer workforce reductions than comparison firms, increasing relative labor costs and employment levels and reducing short-term profits. The effects are strongest among firms without female board members beforehand and are present even for boards with older and more experienced members afterward. The boards appear to be affecting corporate strategy in part by selecting likeminded executives.

The Changing of the Boards: The Impact on Firm Valuation of Mandated Female Board Representation (paper) (ungated)

Kenneth R. Ahern, Amy K. Dittmar

In 2003, a new law required that 40 percent of Norwegian firms’ directors be women – at the time only nine percent of directors were women. We use the pre-quota cross-sectional variation in female board representation to instrument for exogenous changes to corporate boards following the quota. We find that the constraint imposed by the quota caused a significant drop in the stock price at the announcement of the law and a large decline in Tobin’s Q over the following years, consistent with the idea that firms choose boards to maximize value. The quota led to younger and less experienced boards, increases in leverage and acquisitions, and deterioration in operating performance, consistent with less capable boards.

Gender Interactions within Hierarchies: Evidence from the Political Arena (paper) (ungated)

Stefano Gagliarducci, M. Daniele Paserman

This paper studies gender interactions within hierarchical organizations using a large data set on the duration of Italian municipal governments elected between 1993 and 2003. A municipal government can be viewed as a hierarchy, whose stability over time depends on the degree of cooperation between and within ranks. We find that in municipalities headed by female mayors, the probability of early termination of the legislature is higher. This result persists and becomes stronger when we control for municipality fixed effects as well as for non-random sorting of women into municipalities using regression discontinuity in gender-mixed electoral races decided by a narrow margin. The likelihood that a female mayor survives until the end of her term is lowest when the council is entirely male and in regions with less favourable attitudes towards working women. This evidence is suggestive that group dynamics are an important factor in driving the gender difference. Other interpretations receive less support in the data. Our results may provide an alternative explanation for the underrepresentation of women in leadership positions.