ECO Brown Bag seminar | Family Leave Policies and Gender Inequality in Executive Positions: Evidence from Chinese Listed Firms

2024-10-28

11:30 AM - 12:30 PM

BS3114 & Tencent 679-148-449

Family Leave Policies and Gender Inequality in Executive Positions: Evidence from Chinese Listed Firms

Abstract of the presentation:

Can generous family leave policies promote gender equality in the labor market, particularly in top positions? This paper examines the consequential effects of China’s largest historical extension of maternity and paternity leave on the representation of women in top management positions within Chinese listed firms. Utilizing a difference-in-differences design with continuous treatment—–reflecting the varying lengths of maternity and paternity leave extensions across provinces implemented in 2016—–we find that greater inequality between maternity and paternity leave significantly negatively impacts the female ratio of new executive hires. Specifically, the average six-month extension in 2016 corresponds to a reduction in the female executive ratio from 21% to 14.4%. These results are predominantly driven by the extended duration of maternity leave, with more pronounced negative effects for women of childbearing age. We validate our empirical design using an event study approach,

demonstrating no pre-treatment trends. Our findings remain robust after controlling for various confounding factors. Furthermore, we show that greater inequality between maternity and paternity leave has a limited impact on female turnover rates but significantly affects the overall ratio of female executives among all incumbents. This suggests that changes in the overall stock of female executives are primarily driven by shifts in inflow rather than outflow.

We further analyze the impact of policy extension inequality on gender differences in the characteristics of newly hired executives, focusing on those who have succeeded in breaking the glass ceiling. Our findings reveal that in regions with greater inequality between maternity and paternity leave, newly recruited female executives receive lower salaries compared to their male counterparts. However, no significant gender differences in education and past experience are observed among these newly recruited executives. These results indicate that even for women who manage to get promoted after policy implementation, they still face disadvantages in wages compared to their male counterparts, despite having similar backgrounds.

In sum, this study has crucial implications for designing policies aimed at promoting gender equality in top occupations. To ensure that male and female executives face equivalent opportunity costs in light of their important fertility decisions, our results suggest that policymakers could consider prolonging paternity leave to match the length of maternity leave, following examples set by countries with high gender equality indices. This alignment could prevent women from being adversely affected by their childbirth decisions.

About the speaker:

Wei Lin is an Assistant Professor in Institute for Economic and Social Research of Jinan University in Guangzhou, China. Her main research field is applied econometrics, and she is also interested broadly in applied microeconomics such as labor, urban, environment, and IO. Her previous work focuses on dealing with endogeneity in limited dependent models to uncover causal marginal effects, by means of control function approaches, and her current research includes how family leave policies affect the representation of females in executive positions in China.

She received a Ph.D. in Economics from Michigan State University in 2016, advised by Professor Jeffrey M. Wooldridge, and B.A. in Economics from Fudan University in 2011. She was a postdoctoral associate at MIT Center for Real Estate from 2016 to 2018, mentored by Professor Albert Saiz. Her papers appeared in Economics Letters, Environmental Research Letters, Computational Economics, and Review of Industrial Organization.

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