Is gender pay gap low in plants with more female managers? evidence from Vietnamese small and medium enterprises

Abstract

The goal of gender equality in income is not only an important matter of human rights but also basic requirement for development of fair and efficiency. Study on the state of gender inequality in income has the significant implications in moving toward the equality in society and enhancing the efficiency of economic and social growth. Actually, there have been many previous studies related to the issues of gender income difference, particularly the factors impact on reducing the gender gap in earnings. Based on these previous difference, articularly the factors impact on reducing the gender gap in earnings. Based on these previous studies, our research attempts to investigate whether the gender gap in earnings is low in the establishments with more female managers. Using the sample of 1043 employees and 2492 enterprises from the Small and Medium Enterprises survey in Vietnam in the year of 2007, matching employer and employee data and distinguishing occupation the study ends up 345 job-cells. We use this unique matched employee and employer data to investigate the impact of female share in managers on the gender gap in earnings as well as controlling the effects of both firm and worker characteristics on wage of individual. In addition, ordinary least squares modeling and ordinary least square with job-cell fixed effects are applied to explore the effect of proportion of female manager on male - female income difference. Various explanatory variables for characteristics of workers and plants are used as control variables. The result reveals that there is a negative relationship between the female share in managers and gender pay gap; the female share in managers rises 10% points, the gender wage gap thus lowers by 0.6 log points.