Gender Quotas and Their Effect on the Gender Pay Gap in Director Compensation: A Cross-Country Analysis
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2025-07-01
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en
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This study examines the effect gender quotas, both binding and non-binding, have on the gender pay gap in director (executives and non-executives) compensation. In a cross-country analysis with 24 European countries the effect gender quotas have on the gender pay gap is assessed. An Ordinary Least Squares (OLS) analysis with clustered standard errors indicates that women directors receive approximately 15% lower compensation compared to men. To assess the effect of gender quotas on the gender pay gap, the analysis includes an interaction term between gender and each gender quota regime. The interaction term in the non-binding gender quota model shows that in countries with a non-binding gender quota, women earn significantly less than men, indicating a widening of the gender pay gap. In contrast, the interaction term in the binding gender quota model suggests a reduction in the gender pay gap, although the result is insignificant. When directly comparing the two gender quota regimes to no gender quota in a model with a categorical variable, the interaction term of binding gender quota shows a larger statistically negative effect on women’s compensation than non-binding gender quotas. However, the difference in statistically insignificant.
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Faculteit der Managementwetenschappen