Does having women in positions of power reduce gender inequality in organizations? : a direct test

Abstract

While most research on gender inequality in organizations has focused on the "glass ceilings" barring women from obtaining high-status, or management, positions, as women continue to gain access to these organizational roles, a new question arises: Do women in positions of power in organizations reduce gender inequality? If they do, then one way to attenuate gender inequality in organizations would be to increase the prevalence of women in top management positions. Many of the studies that have explored the relationship between women in management and gender inequality in organizations have found a positive relationship between the two. However, other studies show that women in management do not reduce gender inequality in organizations. There are at least two potential reasons for these inconsistent results. First, because direct data on the impact of male versus female managers on the career outcomes of their employees is difficult to obtain, prior studies have measured the impact of women in positions of power on gender inequality using industry or organization-level data to find the relationship between the percent of women in management positions and wage inequality. This is problematic because it is plausible that organizations with more women in management have less gender inequality not because the female managers are having an impact, but rather because the same mechanisms driving women into management are also reducing gender inequality among non-managerial employees. Second, the findings are based on the assumption that managers have control over the allocation of resources to their subordinates, so if managers do not always have control over the allocation of resources, then the results from these studies will be inconclusive. In this paper, I address these two problems by using unique panel data from a large retail financial services firm to directly measure the impact of male versus female managers on the career outcomes of their employees. I find that female managers are more likely to allow their subordinates to use flexible work arrangements than are male managers and that female managers reduce gender inequality in terms of wages, but only for subordinates in the lowest organizational ranks. These findings have implications for research on gender inequality and workplace flexibility.