45 Pages Posted: 22 Nov 2017 Last revised: 12 Jan 2018

Date Written: January 12, 2018

Abstract

This paper investigates how female leadership affects the gender wage gap in the U. S. federal government. Using a unique dataset from the Office of Personnel Management, I track careers of civilian employees from 1988 to 2011. I find that in offices where all supervisors are men, male wages are on average 10.6% higher than female wages. In contrast, in offices where all supervisors are women, the wage gap in favor of men disappears and becomes 3.2% in favor of women due to a 7.1% increase in female wages and a 6.7% decline in male wages. Also, the gender of an executive (a higher level supervisor) has a lesser impact on wages than the gender of regular supervisors. However, the gender of an executive has a greater impact on wages of supervisors than on wages of non-supervisors, which is consistent with the theory of mentorship. I account for potential endogeneity caused by a non-random assignment of supervisors by using office fixed effects and an instrumental variable based on retirement. Finally, I investigate potential mechanisms by examining promotions, exits, starting, and exiting positions.