The Gender Pay Gap in Leadership Positions in Norway

Abstract

Our hypothesis posits that the magnitude of the gender pay gap may be exaggerated because such representations typically fail to account for individual and group characteristics1. The escalating wage disparity with advancing age and experience implies that the most substantial gender pay gaps are likely to occur in leadership roles.

We use employee-employer data to compare women and men in the same firm and occupation. We do not intend to establish any causal relationship between gender and wage. Instead, our findings indicate a correlation between these variables. Upon controlling for individual characteristics, the gender pay gap is most pronounced in the private sector at 32.9%, compared to 21.6% in the public sector. Introducing firm and occupational fixed effects reduces the gap to 13.5% and 7.7% in the private and public sectors. Thus, firm and occupational traits explain 59.0% of the wage disparity in the private sector and 64.4% in the public sector2. A significant part of the remaining annual wage variance is linked to contracted hourly wages rather than contracted hours. Upon accounting for individual characteristics, the annual wage difference among executives is 27.4% in the private sector and 16.6% in the public sector. The gender pay gap in leadership roles is smaller than among all workers, countering prior statistical reports. Our research also finds a slight decrease in the gender pay gap between 2015 and 2020.

Our results substantiate the fact that there is a gender pay gap but also amplify that a large part of it is due to firm and occupational characteristics. While it is well-documented that more women work part-time, this discrepancy becomes minimal once group characteristics are considered. Simultaneously, our findings indicate that the widest gender pay gap is observed among all workers rather than specifically among leadership roles. Compared to broader statistics, this wage discrepancy could be attributed to our modifications and controls for individual and group characteristics.