Two Reasons Why Women Are Less Likely to Be Promoted to Top Positions
Research
20.02.2023
ZEW Study on the Promotion of Women to Top Positions
Saturation and replacement effects are common hurdles for women who aim to enter into top positions, as proven in a research study conducted by researchers at ZEW Mannheim, the Technical University of Munich and the Federal University of Applied Administrative Sciences. In this study, researchers analysed the gender representation in executive and supervisory boards of more than 3,000 companies in Europe between 2002 and 2019.
“Labour market mechanisms alone will hardly be enough to end gender inequality in top positions,” says Professor Hanna Hottenrott, research associate at the ZEW Research Unit “Economics of Innovation and Industrial Dynamics” and professor at the Technical University of Munich. "Women often say they meet invisible and insurmountable obstacles when it comes to promotions to top positions. Our study shows that women face clearly identifiable and direct obstacles which prevent equal representation on executive boards. Structural changes are necessary to initiate changes,” she adds.
Top positions are more likely to be entrusted to men
The researchers were able to identify two effects. First: The higher the percentage of women in executive positions already is in a company, the less likely it is that another woman will be promoted to an executive position. This phenomenon is called saturation effect. Second: A woman is more likely to be promoted to an executive position to replace another woman who help this position until then. This phenomenon is called replacement effect.
“The study shows that man are more likely to be entrusted with top positions, while women are more likely to be promoted to managing positions with limited authority. To overcome discrimination and achieve gender equality the level of the positions women hold matters. Any debate on a quota of women on executive and supervisory boards needs to consider these factors. Quotas can only be useful as long as they do not encourage tokenism,” explains Hottenrott.
