These mechanisms are addressed in two lines of research that constitute this project: one focusing on the impact of gender composition of peers (i.e. workers who belong to the same cohort of labor market entrants) on the entrant’s subsequent careers; the other analyses the impact of gender composition of firm’s management on the same entrants, focusing on the heterogeneous impact gender composition of mid-range managers and executives. The main data source is the Italian administrative data provided by the National Social Security Institute. The scope and the panel structure of the data allows the analysis to focus on male and female workers as they start their first full-time employment. The identification strategy relies on the within firm and occupation variation in gender composition effectively comparing men and women entering the firm at different moments in time, while controlling for firm’s employment and wage growth, as well as wage levels to capture changes in firm’s performance and policies that could have a confounding impact on the careers of new entrants.
Consistent with gender-specific labor market competition among women, the results show that starting one’s career in a firm with relatively more female peers has a persistent and statistically and economically significant negative impact on employment and wages of female labor market entrants. The impact on employment of male entrants is null and the impact of their wages is small and only marginally significant. Increasing the share of women among the junior colleagues by 10 percentage points (pp) decreases employment among female entrants by 0.34 pp in two-year’s time and this effect persists albeit at a much lower level up to 10 years later. The further analysis of the wage growth shows a persistent negative impact on wages of female entrants, up to ten years after labor market entry.
The impact of the share of women among firm’s managers has a positive and rather nuanced effect on employment of both male and female labor market entrants. Increasing the share of female managers by 10 pp increases male employment by 0.4 pp two years after labor market entry and persists for full 10 years. Interestingly, the impact on women is of lower magnitude and is driven by both mid-range managers and executives, although the role of female executives is strongly dominant in the medium run. The effect on men stems solely from the female mid-range managers. Further analysis suggests that the gender composition of managerial class only matters in the male-dominated industries. In these, female managers and executives are particularly scarce. Hence the estimates may indicate differences in quality of male and female managers in these industries, as selection into these positions is expected to differ by gender.
Both analyses include estimates of the impact of gender composition on labor market mobility as well as the type of firm workers transition into. Importantly, the analysis of the impact of gender composition on fertility-related decisions was also carried out. Women who start their careers in companies with a higher percentage of female managers are found to be more likely to return to work after maternity leave in the medium and long-run: the probability of returning to work for mothers increases by an average of 1.5 pp. This is an important result, given that the child penalty is often driven by the extensive margin, that is mothers dropping out of the labor force after having a child.
In conclusion, this project documents the importance of gender composition of firms on careers of men and women. The analysis suggests that women may be competing for employment with their female peers, while the same is not true for men. The results of the analysis are consistent with firms operating with implicit gender quotas for employment and, potentially, promotions. The analysis of the impact of gender composition of management, suggests that while having more women among managers benefits labor market entrants of both genders, the effects are particularly strong among male workers. A more detailed analysis of gender composition among mid-range and high-management of the firm suggests that mentoring quality maybe important for men, but role-model effect matter for female entrants. All in all, gender composition of firms at all levels of hierarchy seems to be an important determinant of career progression of male and female workers.
