Legal Institutions, Shadow Economy and the Glass Ceiling Puzzle

Abstract

The literature underlines the low number of women in management as one of the main indicators of gender discrimination in labor market. This paper investigates the cross-country differences in the percentage of women in senior management. The results show that women are more represented in senior management in developing countries than in “liberal western democracies”. Women also participate more in senior management in countries in which prejudice and discrimination against women are larger. Two economic explanations for these puzzling results are proposed: the weak functioning of the legal system and the large size of shadow economy. The paper provides empirical evidence that is consistent with these explanations.