Gender gaps and the role of female bosses: evidence from matched employer-employee administrative data

Using matched employer-employee administrative data for Uruguay this paper investigates how the gender composition of bosses at firms affects the gender gaps in labor market outcomes of workers. Our results show that having a higher representation of female bosses at the firms leads to lower pay gaps. By including workers’ and bosses’ fixed effects to control for unobserved heterogeneity, we find that working in a firm where there is at least one female boss reduces the gender pay gap by 1.51 log points, and by 3.24 log points when at least fifty percent of the bosses are females. Our results show that gender pay gaps are substantially lower among civil servants compared to those of private workers, but even in these large public firms having female bosses causally reduces the gender pay gaps. We present suggestive evidence that these results are partially explained by female employees being more likely to be promoted when working for a group of bosses with a female composition of at least fifty percent.