Date: August 24, 2003
Contact: David Partenheimer
Public Affairs Office
(202) 336-5706

THE WAGE GAP FAVORING MEN DOESN’T JUST HURT WOMEN’S PAY, ACCORDING TO NEW RESEARCH

Pay of Both Men and Women Managers is Less When Managers’ Subordinates, Peers and Supervisors are Women, Study Finds

WASHINGTON — A new study on managerial pay involving more than 2,000 managers from more than 500 organizations finds that not only do women managers earn approximately nine percent less than male managers, but that pay of both men and women managers is also related to the gender and age of those they work with. The study finds that managerial pay is lower when the manager’s referent group (subordinates, peers or supervisors) is largely female, when subordinates are outside the prime age group, and when peers and supervisors are younger. The findings are published in the August issue of the American Psychological Association’s (APA) Journal of Applied Psychology.

“Beyond the general wage gap between men and women, the findings suggest that salaries for both male and female managers are less when they supervise, work with, or are supervised by females,” according to study authors Cheri Ostroff, Ph.D., of Teachers College, Columbia University and Leanne E. Atwater, Ph.D., of Arizona State University West. “For example, male or female managers whose subordinate group is largely women suffer significantly in compensation levels compared to managers who supervise a majority of men. Similarly, a manager who supervises predominately older workers also receives less pay than one who supervises workers predominately around the age of 40,” say the researchers.

The study sample included data from 2,178 managers from 512 different companies across a wide variety of industries and functional areas. The manager’s sex, age, race, organizational level, experience, education, performance and functional area (e.g., sales, engineering, operations, marketing, human resources) were taken into account prior to examining the effect of the gender and age composition of managers’ referent groups.

Specific findings regarding gender and pay indicate that:

• Managerial pay becomes substantially lower as the percentage of females that the manager supervises increases. For example, on average, a male or female manager whose subordinate group is comprised of 80% female receives approximately $7,000 less in pay than a manager whose subordinate group is 80% male.
• Managerial pay remains relatively constant when the percentage of females that the manager supervises is less than 50%. However, once females become the majority in the workgroup, both male and female managers pay decreases sharply as the percentage of female subordinates in the workgroup increases. For example, a manager who supervises a group comprised of all women receives approximately $9,000 less than one who supervises a group comprised of 50% women.
• On average, managerial pay decreases by approximately $500 for each 10% increase in the percentage of his or her female peers.
• On average, a manager whose supervisor is female receives approximately $2,000 less pay than one whose supervisor is male.

Specific findings regarding age and pay indicate that:

• As the average age of a manager’s subordinates become younger or older than 40, the manager’s pay becomes lower. For example, a manager who supervises employees aged 30 on average receives approximately $4,000 less pay than a manager whose employees are around age 40; a manager who supervises a group of 50 year old employees on average receives approximately $4,000 less pay than a manager whose subordinates are around age 40.
• Managers whose peer group is younger than age 40 on average receive lower pay than managers whose peer group is over 40.
• Managers whose supervisor is younger than 40 receive lower pay than managers whose supervisor is over 40.

“One explanation for the negative affect on a manager’s pay based on the gender of their subordinates, peers and supervisors is that women are perceived as less valuable in the workplace, due to the presumption – true or not – that women are more likely to be absent more often than men, take maternity leave, acquire less training and skills due to family responsibility and be less committed to their work and jobs,” said the authors. “Women may also receive less authority and power in their positions than men, thereby receiving fewer of the resources they need to contribute in more substantial and valued ways in the organizations. And women managers are more likely than male managers to work with and supervise other women, hence reducing their compensation even further,” added the researchers.

Similar results were observed with respect to the ages of a manager’s subordinates. Managers with subordinates outside the prime age group (i.e., younger or older than 40) received lower pay and the perceived value of workers is also a likely explanation for this trend, according to the study. “Younger workers are likely to be viewed as less valuable due to lesser experience or firm specific skills, hence those who supervise them are also likely to be seen as having lesser value,” according to Drs. Ostroff and Atwater. “Older workers are likely to be perceived as contributing less – deserved or not – due to negative stereotypes about their competence and motivation.”

Top managers should investigate the extent to which this type of discrimination is occurring in their organizations, according to the authors, and take steps to understand the reasons for it and to correct the disparities.

Article: “Does Whom You Work With Matter? Effects of Referent Group Gender and Age Composition on Managers’ Compensation," Cheri Ostroff, Teachers College, Columbia University and Leanne E. Atwater, Arizona State University West; Journal of Applied Psychology, Vol. 88, No. 4.

Full text of the article is available from the APA Public Affairs Office or at http://www.apa.org/journals/releases/apl884725.pdf

Reporters: Study authors Cheri Ostroff, Ph.D., and Leanne Atwater, Ph.D., are available for media interviews. Dr. Ostroff can be reached at (212) 678-3336 or by Email and Dr. Atwater can be reached at (602) 404-0987 or by Email.

The American Psychological Association (APA), in Washington, DC, is the largest scientific and professional organization representing psychology in the United States and is the world’s largest association of psychologists. APA’s membership includes more than 150,000 researchers, educators, clinicians, consultants and students. Through its divisions in 53 subfields of psychology and affiliations with 60 state, territorial and Canadian provincial associations, APA works to advance psychology as a science, as a profession and as a means of promoting health, education and human welfare.

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