Do Women Managers Ameliorate Gender Differences in Wages? Evidence from a Large Grocery Retailer

Abstract

Women's disadvantages in labor market outcomes are often attributed to the preponderance of men at or near the top of organizational hierarchies. While theories of homophily predict that women in positions of power ameliorate gender differences in wages for employees under them, status characteristics theory suggests that women face comparable disadvantages when working under men and women. Despite the existence of competing theoretical perspectives, there is little empirical work investigating the effect of women in positions of organizational power on gender inequality among their subordinates. This study makes an important contribution to this literature by using employment records from 3,707 employees at a large U.S.-based grocery retailer over nine years to examine how the gender gap in wages varies in establishments with male and female managers. Consistent with status characteristics theory, the authors find no significant differences between male and female managers in terms of gender-based wage inequality among their employees.