Determinants of gender gaps. Constraints and conditions for success Dr. Marina Ranga

1. Determinants of gender gaps. Constraints and conditions for success Dr. Marina Ranga University of Warsaw Faculty of Management 5 June 2019

2. Outline • Determinants of gender gaps: • Pay inequality • Occupational segregation • Gender bias (in access to finance, in academic and entrepreneurial science) 2. Constraints in starting a new venture

3. Determinants of gender gaps in entrepreneurship • Gender gap in employment • Gender gap in pay • Occupational segregation • Gender bias (discrimination) • Glass ceiling in academia and/or in corporate careers • Steady out-stream of women managers caused by insecurity, lack of connectivity, lack of active coaching/mentoring, work environment too much performance-driven (McKinsey, 2001) • Lack of support networks necessary to build crucial contacts for women • Opposition by men to women’s appointment to top positions

4. Gender gap in employment EU-28 trends in employment rate by gender, people aged 20-64, 2010-2016q3 • The gender gap in employment decreased in 2010-13, and since then has been plateauing at around 12%

5. Women’s and men’s employment rate, per Member States, people aged 20-64, 2016q3

6. The gender gap in pay • Multiple, complex causes, frequently interrelated: • Undervaluing women’s work • Labour market segregation (women and men working in different jobs)  lower wages in female-dominated sectors and occupations than in male-dominated sectors and occupations • The selection hypothesis: because of family care and other responsibilities, women are more likely than men to choose occupations that offer more flexibility, do not require large or continual investments in skills unique to a firm or group of firms, or occupations where skills do not depreciate significantly because of career interruptions, or occupations with possibility to exit/enter the labor market more frequently and at lower cost. • These tend to be occupations where the returns to skills and experience are lower and, other things equal, so are wages. The higher concentration of women in these jobs would then explain why female-dominated occupations pay lower wages than male-dominated ones

7. The gender gap in pay (cont.) • Gender stereotypes • Problems in balancing work and private life • Women having been in jobs for a shorter period (maternity leave, others) • Many sectors give wage premium for some characteristics that are more prevalent among men: • for working very long hours, at particular hours, for less interrupted careers, • for greater geographical mobility, • for non-cognitive skills (negotiation skills, ability to compete/negotiate, interpersonal skills) • In developing countries, higher job flexibility is usually found in informal employment, which typically has lower wages. As women are overrepresented among informal workers, this leads to female jobs paying less than male jobs.

8. The gender pay gap The unadjusted gender pay gap, 2017 (difference between average gross hourly earnings of male and female employees as % of male gross earnings) https://ec.europa.eu/eurostat/statistics-explained/index.php/Gender_pay_gap_statistics

9. Pay gap in part-time vs. full-time employment https://ec.europa.eu/eurostat/statistics-explained/index.php/Gender_pay_gap_statistics

10. Gender pay gap much lower for young employees, tends to widen with age as a result of career interruptions women experience during their working life, particularly older women unable to benefit from specific equality measures which did not yet exist when they started to work. Differences over age groups can have different patterns across the countries

11. The gender pay gap by economic activity • The gender pay gap in financial and insurance activities is higher than in the business economy as a whole, in all EU Member States, except Spain. • In 2017, the gender pay gap in financial and insurance activities varied from 18.3% in Italy to 40.2% in Estonia. • Within the business economy as a whole, the highest gender pay gap was recorded in Estonia (26.2 %) and the lowest in Romania (7.3%). • 11 Member States registered negative gender pay gaps in the water supply, sewerage, waste management and remediation activities and 13 in the construction industry https://ec.europa.eu/eurostat/statistics-explained/index.php/Gender_pay_gap_statistics

13. Mean hourly wages by profession, 2014 https://ec.europa.eu/eurostat/cache/infographs/womenmen/bloc-2d.html?lang=en

14. Higher gender pay gap in the private sector than in the public sector in most EU countries in 2017. • Possibly due to the protection of public sector employees by collective pay agreements and other similar contracts establishing pay, in most countries. • Gender pay gap varied in the private sector from 6.5% in HR to 23.0% in DE • Gender pay gap in the public sector varied from -6.6% in CY to 23.9% in UK

15. Gender pay gap – why close it? • “Equal pay for equal work” is one of the EU’s founding principles: Treaty of Rome (1957), directive prohibits all discrimination in all aspects of pay between women and men for the same work or for work of equal value • Company benefits recruitment and retention of the best and most talented staff • Economy benefits  under-utilisation of women’s skills is a lost resource for the economy and for society at large. A better use of women’s skills allows Europe to better face up to global competition. • Society benefits  more equal society, financial and economic independence for women • EU campaign on the gender pay gap launched in March 2009

16. Occupational segregation • Horizontal segregation: gender segregation across occupations • Differences in the number of people of each gender present across occupations (e.g. nurses, teachers as women; doctors, lawyers as men) • Increased by post-industrial restructuring of the economy, in which the expansion of service industries has allowed many women to enter the workforce on part-time jobs and flexible hours (mothers, in charge of care for children and their homes • Verticalsegregation: gender segregation within occupations • Men's domination of the highest status jobs in both traditionally male and traditionally female occupations. • “Glass ceiling” : allowing men to ride in a "glass escalator" through which women must watch as men surpass them on the way to the top • Generally, the more horizontal segregation is present in a country, the less vertical segregation there is, because women have a better chance of obtaining the highest positions in a given occupation as their share of employment in that particular occupation increases.

17. Higher concentration of women in services, of men in industry

18. US Department of Labor data. Source: https://www.businessinsider.com/pink-collar-jobs-dominated-by-women-2015-2?IR=T

19. https://demography.cpc.unc.edu/2015/03/16/male-and-female-dominated-occupations-2013/https://demography.cpc.unc.edu/2015/03/16/male-and-female-dominated-occupations-2013/

20. Men generally occupy higher positions than women. Around a third (34%) of managers in the EU in 2017 were women. The share of women manager was below 50% in all Member States Largest shares: Latvia (46%), Poland and Slovenia (both 41%), Hungary, Lithuania, Bulgaria, Sweden and Estonia (all 39%). Lowest shares: Luxembourg (19%), Cyprus (21%), Czech Republic (25%), the Netherlands, Denmark and Italy (all 27%). https://ec.europa.eu/eurostat/cache/infographs/womenmen/bloc-2c.html?lang=en

21. Gender balance among board members, chairs and CEOs of large listed companies in the EU, October 2016

22. Women and men in key decision-making bodies of national central banks in the EU, August 2016

23. Challenges faced by women working in male-dominated industries • Pervasive stereotypes, such as that of the “caring mother” or “office housekeeper”. • The view that women are outsiders and threaten the norm. • Work/life demands may delay women’s time to PhD, impacting the number of publications that are important for academic promotions • Fewer mentoring opportunities that are important for success. • Sexual harassment. • Mechanisms to cope with working in male-dominated work environments: • Distancing themselves from colleagues • Accepting masculine cultural norms and acting like “one of the boys”, (exacerbates the problem by accepting the culture) • Leaving the industry https://www.catalyst.org/research/women-in-male-dominated-industries-and-occupations/

24. Women working in male-dominated jobs have high levels of interpersonal stress that could harm their health • Indiana University study presented at the American Sociological Association’s 2015 annual meeting. • Analysed daily stress hormone patterns from more than 440 women in a large U.S. survey who worked in jobs where at least 85% of the workforce were men (construction supervisors, engineers, painters, groundskeepers). • Women in male-dominated jobs experience stressors like social isolation, sexual harassment, low levels of support in the workplace. • Stressors could cause irregular patterns of the stress hormone cortisol  the study women had less healthy cortisol profiles compared to women who worked in jobs with a more even gender split. • Cortisol is particularly sensitive to social stressors and not as much to physical stressors  at least some of the irregularity in cortisol profiles is linked to negative workplace social climates that women face.

25. Gender bias in the access to entrepreneurial finance Self-funding (own cash or with collateral) 'Love money" (3F: "Family, friends and fools") • Most frequent (80-90% of cases) • Likely to be lower for women than for men, because of: • Part-time or low-wage work, • Origin from low-income families • Childbirth breaks which disrupt career progression, promotion, status and affiliation to the organization • Higher business undercapitalisation both at the start and throughout the life of the business for women than for men –> higher business underperformance for women than for men

26. Bank loans • Women can receive fewer/smaller bank loans because they: • Are less likely than men to provide collaterals • Are less likely than men to have generated a credit track record to indicate formal credit worthiness • Tend to start new businesses in crowded sectors (e.g. personal services) – low start-up costs, but also low profits, poor growth potential  volatile sector highly sensitive to external pressure • Are less likely than men to apply for bank financing • However, regardless of the gender, banks are risk-averse and take special precautions in financing small firms in general (e.g. higher interest rates). • Government grants and subsidies • ‘Soft’ loans provided by the government • Strong competition, tough award criteria, co-funding • Women may be biased indirectly by the eligibility criteria

27. Venture capital • In the US VC funds received by women entrepreneurs are not only scarce, but they are actually decreasing, from 14% of VC deals in 2016 to 11% in 2017. • In Europe only 12% of founders at EU companies that received VC funding are female. • Female founders get smaller portions: the average deal size for women was almost 30% lower than the average across groups. • This affects the high end of the market: only 25 of the global crowd of around 280 “unicorns” companies counts a female founder (source) • Diversity in VC-backed companies remains extremely low, with less than 5% led by a woman and only 15% with a woman co-founder in 2017. • 4.5% of VC investments were in woman-led companies in 2017, women as 8% of VC investing partners (Tech Crunch) • Women VCs making 2X as many investments in companies with a woman founder as their male peers. • Over 40% of women entrepreneurs consider the limited number of women VCs as a significant barrier to their success.

28. Crowdfunding • The report “Women Unbound: Crowdfunding – Unleashing Female Entrepreneurial Potential” (July 2017) by PwC and the Crowdfunding Center shows that women-led campaigns reached their funding target more often than male-led campaigns. • iFundWomencrowdfunding ecosystem designed for female entrepreneurs, named by NASDAQ’s as one of the “10 Best Sources of Funding for Women Entrepreneurs”.

29. Gender bias in academic science • Construction and perception of women’s role in society: • Marriage, raising children, running the family home • Lack of access to education and employment; education only for the upper classes • Financial dependencies on fathers, brothers or husbands • Rare employment opportunities in science (women’s colleges) coming at considerable personal price • Difficulty to get scientific recognition - first women elected to: • US: National Academy of Sciences - 1925 (Florence Rena Sabin, physician) • UK: Royal Society of London - 1945 (Kathleen Lonsdale, crystallographer, and Marjory Stephenson, biologist) after rejecting the proposal for the fellowship of Hertha Ayrton in 1902 because she was a married woman • FR: Académie des Sciences - 1962 (Marguerite Catherine Perey, physicist, student of Marie Curie) • Slow social recognition – women’s right to vote (Britain 1928; US, 1919; other countries in Europe and beyond until the mid-1950s)

30. Gender bias in academic science determines a gender bias in entrepreneurial science

31. Gender gap in academic science: awards Ma et al. (2019), Women who win prizes get less money and prestige, Nature 565: 287-288

32. Ma et al. (2019), Women who win prizes get less money and prestige, Nature 565: 287-288

33. The Nobel Prize gender gap https://www.aei.org http://fortune.com/2015/10/12/women-nobel-prizes/

34. Gender gap in academic science: research productivity “The productivity puzzle” (Cole and Zuckerman 1984) • Men publish more papers, on average, than women, although the gap differs between fields and subfields • Women publish fewer papers in areas with expensive research (e.g. high-energy physics), possibly as a result of policies/procedures relating to funding allocations. • Women are less likely to participate in collaborations that lead to publication, much less likely to be first or last author • Articles with women in dominant author positions receive fewer citations than those with men in the same positions • Women's publication portfolios are more domestic than males'

35. Gender gap in academic science: research funding • Fewer women than men apply for grants, apply for fewer grants and request smaller amounts, but female researchers as successful in gainingfunding as males (Blake & La Valle, 2000) • Women’s lower propensity to apply for funding, lower success in getting grants, possibly due to universities' internal selection procedures inhibiting women’s applications (Nervik, 2006) • Significant discrimination against women in awarding postdoc fellowships (Wennerås & Wold, 1997; several follow-up studies) • Gender gaps in grant funding arise from less favourable assessments of women as PIs, not of the quality of their proposed research (Witteman et al. 2019)

36. A deficit model Bias caused by personal reasons that lie within women themselves, either innate or the result of gender socialization and cultural values - Educational background - Ability - Creativity - Motivation, lack of self-confidence - ‘Bitch avoidance’ - Commitment to scientific career A structural obstacles model Bias caused by formal or informal, legal, political, or social obstacles that differentially affect women - Social duties (marital status, children, domestic and elderly care) - Institutional sexism, stereotypes - Lack of family-friendly policies at work - Structure and functioning of science * ‘Leaky pipeline’ * Gender “separation of labour” * Glass ceiling * Male-dominated academic peer- review and evaluation procedures * Less mentors for women * “Old boys club”, “stag effect”’, fewer women in informal networks Gender bias in academic science

37. Gender bias in entrepreneurial science: Women in patenting • The number of patents that had any women inventors more than quintupled in 1977-2010 (from just over 1,500, 3.4% to just under 23,000, 18.8%) • The number of patents granted with no female inventors more than doubled (from just over 43,000 to just under 100,000), over the same time period IWPR (2016), Equity in Innovation: Women Inventors and Patents

38. Gender parity in patenting not likely before 2092 • At the current rate of change since 2000, women will not see parity in patenting until 2092 • Parity defined as half of all patents having at least one woman inventor listed IWPR (2016), Equity in Innovation: Women Inventors and Patents

39. Women’s patenting is correlated with increases in the share of STEM degrees awarded to women • Patents with at least one woman inventor increased from 3.4% in 1977 to 18.8% in 2010. • STEM degrees awarded to women from 20.2% in 1977 to 33.5 % in 2010 • More women holding degrees in each STEM sub-field in 1977-2010, except for computer science • The share of female engineering degree-holders increased from 6.4% in 1977 to 19.1% in 2010, stalling in early 2000’s  threat to gender parity since engineering is a very patent-intensive STEM field IWPR (2016), Equity in Innovation: Women Inventors and Patents

40. More women inventors in less STEM-intensive fields

41. More women inventors in less STEM-intensive fields • More women inventors in patent classes that are less STEM-intensive (medicine and chemistry), corresponding to their underrepresentation among STEM degree holders • Far more men inventors in mechanical and electronic fields IWPR (2016), Equity in Innovation: Women Inventors and Patents

42. More patent applications filed by men, but similar acceptance rates IWPR (2016), Equity in Innovation: Women Inventors and Patents

43. Technology, Commercialization and Gender 1 Introduction Setting the Scene: An Insight into the “Gender Divide” in S&T Advancement 2 The Gender Dimension in German Knowledge and Technology Transfer: A Double-Edged Sword 3 Women’s Role in Biotechnology Research: The Case of Mexico 4 Patenting Activity in Spain: A Gender Perspective 5 Gender Patterns of Businesses with Growth Potential in Croatia 6 Gender-Sensitive Business Counselling: Changing the Gendered Pattern and Understanding of Entrepreneurship 7 Gender, Commercialization and Thought Leadership in Computing: Examining Women’s Participation in IT Patenting and Conference Paper Authorship 8 Fostering Collaborative Innovation: Fraunhofer’s Participatory Methodology 9 Case Study: Hertha Ayrton

44. Fix the system, don’t fix the women! • Equality and diversity policy at the university, department-specific gender policy based on need and vision • Include practices, which will benefit both men and women (engendering the teaching curriculum, putting in place strategies for an inclusive culture). • Support of female researchers throughout their careers • Improve the skills needed by early-career researchers, interdisciplinary research projects.  • Gender training should become part and parcel of institutional culture • Gender training for department heads in the context of their role • Embedding gender equality at the department level (awareness of gender issues, surveying women at different stages of their careers)

45. Women’s constraints in starting a small business • Constraints depends on the woman’s background (age, education), reasons for self-employment (necessity vs. opportunity), nature of the business: 1. Constraints related to women motivated by necessity (push factors) 2. Constraints related to women motivated by opportunity (pull factors) 3. Constraints faced by young women entrepreneurs

46. 1. Constraints related to women motivated by necessity (push factors)

47. 2. Constraints related to women motivated by opportunity (pull factors) • Different profile: better educated, usually had managerial/business experience, are younger at entry  mostly concerned with finance and growth

48. 3. Constraints faced by young women entrepreneurs

49. THANK YOU! marina.ranga@gmail.com