Globally active companies hire more women

A current study conducted by WU researchers Alyssa Schneebaum and Carolina Lennon has shown that global firms hire a greater share of women for their full-time, permanent positions than domestic non-exporting companies. Prevalent gender norms in the customers’ and owners’ countries play an important role. The gender of a firm’s top manager, however, remains unaffected by the gender norms in commercial partner countries.

Together with co-author Carolina Lennon, Alyssa Schneebaum from WU’s Institute for Heterodox Economics conducted a study to investigate whether globalization provides opportunities for gender equality in employment. To answer this question, the researchers analyzed data from 2006 to 2014 on 30,000 firms in more than 100 developing and emerging economies. The results showed that there is a correlation between global economic interaction and the gender distribution among a firm’s employees. Alyssa Schneebaum explains, “What we see here is a ‘race to the top,’ meaning that global firms adopt more equal hiring practices compared to non-global firms if they interact commercially with more gender-equal economies. There seems to be no evidence of a race to the bottom, that is, gender inequality isn’t imported through commercial links with gender-unequal countries.” According to the United Nations Gender Equality Index, many European countries have high levels of gender equality, especially Switzerland, Sweden, and Denmark. Austria is ranked at place 14 in the Index. The highest levels of inequality were found in many African countries like the Republic of Chad, or in countries like Yemen.

Transfer of social norms

The results of the study show that firms that export or who are owned by parent companies abroad generally have a higher female share of full-time, permanent employees than firms which are only active in their national markets. This was especially apparent for exporters with customers in countries with equal gender norms: These companies employ 6–7 percentage points more female workers than very similar non-exporters in the same local market. Ownership structures also play a role. “Domestically-owned firms hire 17–18 percentage points fewer women than foreign-owned firms in the same market that are exposed to gender equality,” reports the study’s co-author.

Top management is still predominantly male

The beneficial effects of exposure to gender equality are not the same across the board, however. Production jobs (such as assembly line workers) benefit the most. Non-production jobs (such as office workers) also benefit, however, to a lesser extent. “The percentage of women only increases at the lower and middle levels of the organizational structure. Exposure to equal gender norms has no effect at all on top management positions,” says Schneebaum. “These results are important, because they show how commercial trade serves as a medium through which gender norms can be transmitted across countries – that’s really good. But just as important is the limitation we find: that for more prestigious jobs, it will take more than just commercially-based exposure to norms of equality to get more women into management positions and reduce gender inequality.”

The STUDY