Female entrepreneurs have an influence on the gender pay gap
Press Release of October 2, 2024
First study of the relationship between the gender of entrepreneurs and the gender pay gap – Finnish data shows: wage gap in companies owned by women more than two percentage points lower than in companies owned by men – In many service industries, the gender pay gap is close to zero when companies are owned by women
In companies owned by women, the earnings gap between female and male employees is smaller – in companies in many areas of the service sector, this earnings gap is even close to zero. This is the result of a recent study by the German Institute for Economic Research (DIW Berlin). For the first time, the relationship between the gender of entrepreneurs and the wages paid to female employees compared to their male colleagues was examined. On average, the wage gap in companies owned by women is more than two percentage points lower than in companies owned by men. However, there are considerable differences between industries, as study author Alexander S. Kritikos, member of the DIW Berlin's Executive Board, has found: “In the service sector, the pay gap is significantly smaller when companies are owned by women. In these often smaller companies, management structures allow female entrepreneurs to determine wages in their businesses.”
© DIW Berlin
More influence for female entrepreneurs in small businesses
“The gender pay gap, on the other hand, is particularly large in male-dominated industries and remains so even when the companies are owned by women,” says DIW economist Kritikos. In the manufacturing sector in particular, the gender of the owners has little influence on the earnings differences between men and women. The study also makes it clear that the influence of female entrepreneurs on the gender pay gap in larger companies is also limited. “Overall, it is worthwhile to provide greater support to women on their path to self-employment and to reduce existing barriers. In addition to positive effects on economic growth, this could also reduce the gender pay gap,” concludes Alexander S. Kritikos.
Data for Finland is used for the study, as such an analysis is not possible for Germany due to data restrictions. Finland is quite comparable to Germany in this context. For the observation period, there is a similarly high gender pay gap for both countries, and the female employment rate is similarly high in both countries. The proportion of the population with a “traditional role model” for women is also similarly low in both countries.
Links
- Study in DIW Wochenbericht 40/2024
- High-resolution infographic(JPG, 0.76 MB,© DIW Berlin)
- Interview with study author Alexander S. Kritikos
play_arrow
Watch video
The video is hosted on an external platform (YouTube).
By playing the video, you leave DIW Berlin’s website.
More information in our Privacy Policy.
You can read the full text of the film in the transcript.
Verdienen Frauen bei weiblichen Chefs mehr?: Nachgeforscht bei Alexander Kritikos
Topics: Gender , Inequality , Labor and employment
