Trickle-down effects of the women’s quota – are there any?

The Netherlands introduced a women’s quota requirement for listed companies about 18 months ago. Zoltán Lippényi has researched the effects of this quota outside the boardroom since January of this year. What are his findings so far? Does having more women at the top lead to better career opportunities and less gender pay disparity lower down in an organization?

Author: Bert Platzer / Photographer: Reyer Boxem

Unequal pay for equal work – anyone with some sense of what is fair will consider this skewed. Yet, Zoltán Lippényi, assistant professor of sociology, believes that some qualification is in order. He argues that the pay gap is not always unfair. ‘Businesses use pay as an incentive to motivate people and to reward them for their performance. It becomes unfair if a man and a woman have the same job title and deliver an identical performance, but are paid unequally and the woman is less likely to be promoted than her male counterpart. That may well be discrimination.’

At least a third

The Dutch Diversity Target and Quota Regulations – in short the women’s quota – are designed to prevent this type of discrimination. Under this piece of legislation, at least one third of the members of the supervisory boards of listed companies and large public enterprises must be women and at least one third must be men. Given that the supervisory board monitors the performance of the executive board, expectations are that the women’s quota will trickle down to the rest of the organization.

Trickle-down effects

In his current research, for which he was awarded a Vidi grant, Lippényi studies these trickle-down effects. ‘The million-dollar question is of course whether this legislation will also prompt companies to hire more women in their lower echelons and whether it will narrow the pay gap between men and women, and promote greater equality in career progression. Another interesting question is whether or not the quota has a broader effect. The new legislation applies to listed companies and large enterprises only. While their combined headcount is substantial, they make up just a small proportion of the business landscape. That’s why it’s worthwhile looking at whether the legislation is also making inroads into smaller organizations that are not subject to the quota. The Dutch government is keen to find out whether this will help to combat disparity throughout the corporate sector.’

Statistical data

There is also a practical reason why Lippényi focuses mainly on the pay gap as an indicator of the level of equality between men and women on the work floor. ‘Statistics Netherlands (CBS) has access to the social security benefits database and makes this database available to researchers. The data has been anonymized, but it still retains some important information. You can see whether a person is male or female, which people work in the same organization or even in the same business unit, how large a company is, and what sector it operates in.’

Research

Lippényi links other data sets on board composition to the information provided by Statistics Netherlands. This allows him to study whether companies that are governed by the women’s quota are experiencing trickle-down effects in the form of advancement of women. Whether they are remains to be seen; the research started last January and is ongoing.

Comparative analysis

Lippényi’s research is particularly interesting because the trickle-down effects have hardly been studied in other countries. Where they have been studied, the findings are varied. ‘In Norway, the first European country to introduce a women’s quota, and in Italy, researchers didn’t find any effects, but in France, they did. That said, the French study uncovered effects in the higher pay scales only; the level below experienced virtually no benefits from a larger contingent of female managers. The outcomes of these studies are difficult to compare because the quota in some countries is stricter than in others, and different threshold values are used.’

International network

Lippényi is part of the Comparative Organizational Inequality Network, in which researchers from 15 countries in Europe, the Americas and Asia are represented. They study pay disparity from an international perspective. ‘The network recently completed a study of the pay gap in companies. Obviously, you’ll have to look at specific cases to determine whether a pay gap between a man and a woman with the same job title is justified, but any type of systemic disparity would tell you that there might be a problem. The Netherlands turns out to be doing rather well compared to other countries. Gender inequality seems to be decreasing.’

International network

Lippényi is part of the Comparative Organizational Inequality Network, in which researchers from 15 countries in Europe, the Americas and Asia are represented. They study pay disparity from an international perspective. ‘The network recently completed a study of the pay gap in companies. Obviously, you’ll have to look at specific cases to determine whether a pay gap between a man and a woman with the same job title is justified, but any type of systemic disparity would tell you that there might be a problem. The Netherlands turns out to be doing rather well compared to other countries. Gender inequality seems to be decreasing.’

Lagging pay

But that does not mean that pay disparity will be a thing of the past in the Netherlands relatively soon. Besides the pay gap between men and women with the same job title at the same company, there is also the sector pay gap to contend with. Lippényi: ‘Studies in the UK and North America that have been running for up to 50 years show that the more women work in a particular field, the more lowly this field will be regarded compared to similar fields that are typically dominated by men. Healthcare and education are two examples of sectors in which women have become disproportionately represented in the past decades and where pay is lagging.’

Women in academia

Lippényi does not have any data on the gender pay gap at the UG, but he does know about a Dutch study that was performed by the National Network of Female Professors in 2015. ‘This study showed that women are paid less than men with the same job profile, for instance in the professor and associate professor categories. The difference is most prevalent between male and female professors. Other reports tell us that the share of female professors continues to be low; it was 26.7% in 2022.’

Tenure track

For this reason, Lippényi is happy to see that the UG has had a tenure track since as early as 2003. ‘Our tenure track is a highly formalized career policy that provides for a fixed pathway to secure promotions. You can’t do away with inequality altogether, but good policy should at least nudge us in the right direction.’

Contact

Zoltan Lippényi