Firm leadership and the gender pay gap : do active owners discriminate more than hired managers?

Using a large linked employer-employee data set for Germany, we investigate differences in the unexplained gender pay gap between owner-run and manager-run firms. We hypothesise that owner-run firms have higher pay gaps because active owners are less inhibited to live out profit-reducing discriminatory preferences against women than hired managers. We indeed find that the pay gaps are significantly higher in owner-run plants, both statistically and economically. Yet, scrutinising these results by restricting our analysis to plants that only differ in leadership regime, this substantial difference disappears. Therefore, our findings do not support that active owners are more discriminatory per se. -- Gender pay gap ; firm leadership ; Germany