Gender discrimination at the top and product market competition

We show that increasing the intensity of product market competition can reduce discrimination against female managers, even in an environment in which all employers have a preference for discrimination. The reason is that due to the glass ceiling effect, female managers will, on average, be more skilled than male managers and will therefore, on average, be more beneficial for the firm when product market competition is intense. Using detailed matched employee-employer data, we find that (i) more intense competition leads to relatively higher wages for female managers and (ii) the share of female managers is higher in firms in more competitive industries.