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The Gender Pay Gap

explanatory Essay
797 words
797 words
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For many years, this has been the topic of many discussions. Is there a gender compensation gap? This disparity has been well documented in prior academic work such as Bayard & Al in 2003. The Economic Committee of the US Congress already reported in 2010 that female employees earned on average 77 cents for every dollar earned by a male employee. This gender pay gap does not just apply to non-management employees. The US Government Accounting Office also indicated in 2007 that on average a female manager earned 81% of their male counterparts’ salary. This article tries to answer that exact question but on focusing mainly on top level executive, and whether or not there is a gender pay gap amongst CEO’s. According to their results the …show more content…

In this essay, the author

  • Explains that there is a gender compensation gap, which has been well documented in prior academic work such as bayard & al in 2003.
  • Explains that martin bugeja, zoltan p. matolcsy & helen spiropoulos are interested in whether or not a gender pay gap exists amongst ceo’s.
  • Explains that jordan and al in 2007 did not find any major evidence of a gender pay gap for ceos, except for lower level executives. this article uses the propensity score matching technique to compare male and female ceo's pay.
  • Explains how the propensity score matching technique allows s to compare male and female ceos on a more even playing field in comparison to previous studies.
  • Opines that the lack of female ceo is a major weakness of the study.

Matolcsy & Helen Spiropoulos the authors of this article seem to be particularly interested in whether or not a gender pay gap exist amongst CEO’s. Prior work of Vieito and Khan in 2012, Munoz-Bullon in 2010, Bell in 2005 and Bertrand and Hallock in 2001 have already tackled the question of possible gender pay difference between male & female CEOs and their work seem to show evidence of pay difference. It seems that male executives receive higher compensation than female executives. However, Bell in 2005 demonstrated that the compensation gap between male and female executives tends to be lower “when a firm is led by a female CEO” (Is there a gender gap in CEO compensation – M. Bugeja, Z. P. Matolcsy, H. Spiropoulos). Studies from Elkinawy and Stater in 2011 also show a gender pay gap amongst lower level executives, but it seems that the pay difference has been diminishing over …show more content…

Previous studies tend to match male and female CEOs within an industry in a similar size firm. The propensity score matching used in this study enables the authors to “identify control firms within year and industry using firm size (sales), board size and percentage of female directors matching variables […] it indicates that the use of propensity score matching identifies control firms that are statistically similar across multiple dimensions to firms with a female CEO.” (Is there a gender gap in CEO compensation – M. Bugeja, Z. P. Matolcsy, H. Spiropoulos). This technique enable the authors to compare male and female CEOs on a more even playing field in comparison to previous studies as discussed by Armstrong and Al (2010). The authors collected data for US listed firms between 1998 to 2010 from the Investor Responsibility Research Center (IRRC), Compustat Fundamentals Annual and Execucomp databases according to the

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