Employee Discrimination against Female Executives

The theory of employee discrimination gives a possible explanation for the scarcity of female executive officers. This paper tests the employee discrimination hypothesis by measuring the wage premium received by employees working with female executives against their tastes for discrimination. Using a fixed effects analysis of establishment-level panel data on Japanese employees, we separate the discrimination premiums that would otherwise cause a bias from the establishment-level unobserved productivity and unobserved employee characteristics by gender of executives. Our findings reveal that both male and female employees receive small but significant wage premiums (0.6-0.9 percent) when working for female executives.24 p