A look at some new perspectives on the phenomena that puts a roof on many dreams.
A mere 22.5% of Fortune 500 board members in 2018 were women. Despite women accounting for more than 54% of the labour force in OECD countries, they make up but a meager portion of board and CEO members. This issue can be analyzed through the glass ceiling effect. The term, first used by George Sand in her never-performed play “Gabriel”, is still of utmost importance today. Sand writes: “J’étais une femme; car tout à coup mes ailes se sont engourdies, l’éther s’est fermé sur ma tête, comme une voûte de cristal impénétrable, et je suis tombé, tombé…” in 1839. A lot has changed since 1839; nevertheless, 200 years later the majority of women are still unable to climb to the upper echelons of society, particularly in the corporate domain.
The glass ceiling effect gained recognition in the 1970s and 80s after being used by economists and feminists alike to explain the gender gap in the workforce. The USA even created the Glass Ceiling Commission through the 1991 Civil Rights Act to attempt to address institutional and societal barriers that prevented women, either consciously or unintentionally, from attaining certain socioeconomic stations. Since then, almost three decades have passed, and the term ‘glass ceiling’ continues to be pertinent.
Criteria to identify the glass ceiling
The Federal Glass Ceiling Commission defines the term as “the unseen, yet unbreathable barrier that keeps minorities and women from rising to the upper rungs of the corporate ladder, regardless of their qualifications or achievements.” It is crucial to see the glass ceiling as a separate concept, not to be confused with gender inequality. In line with this idea, four criteria coined by David Cotter can be used to identify the glass ceiling effect. 5
- “A glass ceiling inequality represents a gender (…) difference that is not explained by other job-relevant characteristics of the employee.
- “A glass ceiling inequality represents a gender (…) difference that is greater at higher levels of an outcome than at lower levels of an outcome.”
- “A glass ceiling inequality represents a gender (…) inequality in the chances of advancement into higher levels, not merely the proportions of each gender or race currently at those higher levels.”
- “A glass ceiling inequality represents a gender (…) inequality that increases throughout a career.”
A Few Popular Explanations for the Glass Ceiling
The glass ceiling is a phenomenon being tackled from many angles. People have tried to explain gender differences in work and income due to disparities in education, inflexibility, and structural organisation of jobs.
Over the past years, the difference in education level between sexes has significantly decreased in the United States. Since the 1970s, the US men’s college graduation rate has stagnated around 30%, while women’s rates have augmented and surpassed 40% today. (2) One might posit that the gender pay gap would thus have been reduced; however, one must acknowledge that women study courses in which the highest incomes (90th percentile) are around 20% smaller than fields preferred by men. Many sociologists and behavioral economists have held that this field-of-study disparity is due to historical affiliations to certain roles, or, conversely, historical push-back from professionals in others. Specifically, these same academics posit that it is for this reason that women pursue lower-paying careers in the domains of nursing or teaching, as opposed to banking or real estate, given that they were pushed away from the latter and towards the former time and time again throughout the past centuries, and thus, society has inculcated within women in the labor force a certain career direction, creating a historical and self-enforcing glass ceiling.
The higher flexibility that has been attributed to the males is also a reason for the gender gap. In a study conducted by the Chicago Booth School of Business, it was found that female graduates earn ½ the amount men earn, ten years after graduation. The female employees have to deal with a “triple burden of home, career and a sexist workplace” (Gupta 2005.) Even though family policies are being encouraged, women often take several years off due to childbearing and later work shorter hours to rear the children; hence, men are able to put in longer hours and surpass the women, in an unfair yet commonplace scenario.
The way in which jobs are classified into wage brackets also leads to inequalities. Acker observed that many firms paid managers for work done by their mostly female assistants. This occurred as the job description of the administrative assistance did not cover these actions. Moreover, the difference in work descriptions hinders women from using the position of an assistant as a stepping stone to the management level. In the past, this was possible; however, today, people are directly employed to the management position, thereby increasing inequality.
Finally, stereotypes very much impact recruitment processes and induce inequalities. Acker finds that through socialization, our society today sees top managerial positions through a masculine lens. Men are believed to be more able, aggressive, and stronger than women and are therefore found to be better representatives of the company. Consequently, human resources are more likely to hire the candidate that fits into their subconscious viewpoint. At the highest level, board members themselves decide on the candidate that will be employed. Many studies have shown that like attracts like, meaning that corporate boards that are currently made up of white men are more likely to choose white men. Moreover, women are mostly assigned less important management positions like Human Resources Director, and are therefore also less likely to be promoted.
A New Psychological Approach Points to Differences in Risk Preferences
A recent approach develops the idea that inherent psychological differences between the sexes contribute to the gender gaps. Eckel and Grossman (2008) have found that women tend to be more risk-averse than men. Several experiments have proved this. For instance, Gneezy’s (2003) study analyzed students solving mazes. At first, they are recompensed using a piece rate scheme. Here, both men and women performed equally. Then they changed the compensation scheme to a tournament scheme. Here, only the person who solves the most mazes would receive all benefits. Overall, men performed better than women, as they solved 40% more mazes. These results were used by some to claim that women shy away from environments in which high levels of competition are necessary, opining that they do not want to expose themselves to the high levels of risk and competition which are essential to reach top positions in the business world, further consolidating the glass ceiling. However, it is crucial to note that these results are not conclusive – other experiments, such as the bomb elicitation task, prove the opposite. Hence, the psychological analysis cannot be taken as factual evidence. Moreover, the debate on why such differences in risk preferences are observed range from the biological to the sociological with no academic consensus.
Combatting the glass ceiling
Several solutions can be used to combat the issue of the glass ceiling. Marianne Bertrand mentions affirmative action policies as a possible solution. For instance, in Germany, quotas enforce that at least 35% of board members have to be women. However, as one of our articles highlighted a week ago, there is no evidence that quotas bring any trickle-down effect of corporate diversity to companies generally. Some other solutions proposed by Bertrand include gender-neutralizing childcare. Under this reformed system of childcare, Both parents will be granted the right to take paternity/maternity leaves in order to shift the social norm that women have a social obligation to care for the children. This solution is a substantial one, as it seeks to diminish and antiquate the stereotype of the housewife. Finally, one of the most feasible and easily implementable solutions is to create “family-friendly” work environments. Firms should include options to work from home and have more flexible hours. Through such measures, women will become increasingly represented in the upper rungs of the business world. Thus, a new generation of young women can grow up in a world where it is normal, desirable, and attainable to be a high-earning entrepreneur.
Bertrand, Marianne. “Coase Lecture – The Glass Ceiling.” Economica, vol. 85, no. 338, 2018, pp. 205–231., doi:10.1111/ecca.12264.
Cotter, D. A., et al. “The Glass Ceiling Effect.” Social Forces, vol. 80, no. 2, 2001, pp. 655–681., doi:10.1353/sof.2001.0091.
Gneezy, U., et al. “Performance in Competitive Environments: Gender Differences.” The Quarterly Journal of Economics, vol. 118, no. 3, 2003, pp. 1049–1074., doi:10.1162/00335530360698496
“Measuring Women’s Economic Empowerment.” OECD Development Policy Papers, 2019, doi:10.1787/02e538fc-en.
Sand, George, and George Sand. Oeuvres Complètes De George Sand. Perrotin, 1843.