This is why we have a glass ceiling in the labor market

17 December 2018

Joacim Tåg, IFN, commented, at an SNS seminar, on a presentation by Marianne Bertrand, professor at The University of Chicago Booth School of Business. Bertrand presented research on the underlying causes for why women are still underrepresented amongst high-income earners despite the progress in equality of the genders in several other aspects.

At the seminar Joacim Tåg talked about the paper “What prevents Female Executives from Reaching the Top?” that he wrote together with Matti Keloharju and Samuli Knüpfer. The authors conclude that neither ability, competence or education can explain why it is less likely for women to become CEOs and receive a high salary.

Tåg and co-authors found that female bosses are on average more qualified for the position than their male colleagues. The authors explain that the difference in the probability of becoming a CEO and receiving a high salary between men and women can to a great extent be explained by the fact that the advancement of women’s careers are hindered during the first five years following the birth of their first-born child.

Marianne Bertrand, who has studied the American labor market, explained that childbirth accounts for much of the difference between men and women’s position in the labor market.

"Women work fewer hours and have 50 percent lower wages ten years after graduating. And it is childbirth that explains the difference", said Bertrand.