Gender Interactions within Hierarchies: Evidence from the Political Arena

52 Pages·2011·1.09 MB·English

Gender Interactions within Hierarchies:
Evidence from the Political Arena∗
Stefano Gagliarducci† M. Daniele Paserman‡
Tor Vergata University and IZA Boston University, NBER, CEPR and IZA
September 2011
Abstract
This paper studies gender interactions within hierarchical organizations using a
large data set on the duration of Italian municipal governments elected between 1993
and 2003. A municipal government can be viewed as a hierarchy, whose stability over
time depends on the degree of cooperation between and within ranks.
We find that in municipalities headed by female mayors, the probability of early
terminationofthelegislatureishigher. Thisresultpersistsandbecomesstrongerwhen
wecontrolformunicipalityfixedeffectsaswellasfornon-randomsortingofwomeninto
municipalities using regression discontinuity in gender-mixed electoral races decided
by a narrow margin. The likelihood that a female mayor survives until the end of her
term is lowest when the council is entirely male, and in regions with less favorable
attitudes towards working women. This evidence is suggestive that group dynamics
are an important factor in driving the gender difference. Other interpretations receive
less support in the data. Our results may provide an alternative explanation for the
underrepresentation of women in leadership positions.
JEL Classification: D74, J16, H70, M54.
Keywords: Gender, discrimination, hierarchies, government stability, municipal gov-
ernment.
∗Forthcoming,Review of Economic Studies. WethankImranRasul,three excellent referees, andseminar
participantsatBostonUniversity,UniversidadCarlosIII,CEMFI,CollegioCarloAlberto,CornellUniversity,
UniversityofChicago,ESSLE-CEPR 2008,HarvardUniversity,MILLSMilan,MIT,MOVEBarcelona 2010
andSAE 2008fortheir insightfulcomments. Weare alsogratefultoFabioAlbianifromthe ItalianMinistry
of Interior for excellent assistance in data collection.
†Email: [email protected].
‡Email: [email protected].
1 Introduction
Despite the substantial increase in female labor force participation over the past 40 years,
and the narrowing of the gender gap in wages, women are still underrepresented in leader-
ship positions, in the corporate world, in academia, in government and in other prestigious
professions.1 Most of the existing research has focused on trying to explain the reasons for
this phenomenon. However, relatively little is known about how women actually fare once
they have reached the top of an organization. In this paper, we attempt to fill this gap by
investigating the performance of one particular type of leaders, elected politicians in mu-
nicipal governments. Specifically, we use a unique and very rich data set on the universe
of Italian municipal governments elected between 1993 and 2003, and we ask whether the
probability that the elected administration survives until the end of its mandate depends on
the gender of the chief of the executive.
The Italian municipality is a parliamentary system, with the government organized as
a hierarchy. The mayor, who is directly elected, is appointed to run the executive, and
members of the assembly endorse or oppose the proposed policies. A mayor who cannot
muster a majority of assembly members in support of his or her policies can be forced out of
office by a simple no-confidence vote in the council. This leads to the immediatetermination
of the mandate and to new elections. Hence, the chief of the executive’s survival in office
depends on the abilityto forge and maintain stable majoritiesthat willendorse the proposed
policies. Our research question, then, is about the relativeability of male and femalemayors
to foster cooperation among the assembly members.
Our main finding is that, after controllingfor a large numberof observable characteristics
ofthemayorand thecouncil,theprobabilityofearlyterminationof thelegislatureisbetween
3 and 5 percentage points higher when the mayor is a woman. For comparison, the average
probability of early termination of municipal councils headed by male mayors is about 10
1Bertrand and Hallock (2001) document that between 1992 and 1997 women represented only 2.5% of
the top paid executives in U.S. corporate firms.
1
percent. We find an even larger effect when controlling for non-random sorting of women
across municipalities using a regression discontinuity design in gender-mixed electoral races
decided by a narrow margin. 2
There are a number of possible explanations for these findings. For example, it could
be that female mayors are more likely to resign of their own initiative, because of family
responsibilities, because in general women have higher turnover rates, or because women
are more inclined to avoid conflictual situations. This would imply that the higher early
termination rate of women is driven mostly by spontaneous resignations, as opposed to no-
confidence votes or resignation of the city council. This hypothesis is not supported by the
data: female mayors are significantly more likely to be ousted from office by resignation of
the city council, but are no more likely to resign spontaneously.
We also find no evidence that female mayors are more likely to resign early because of
differences in performance while in office. There are in fact no differences between male and
female mayors in various measures of government efficiency. Also, by looking at the size
and the composition of the municipal budget, we find no major differences in the types of
policies enacted, suggesting that the differences in the probability of early termination are
not driven by preference heterogeneity between the female mayor and the municipalcouncil.
Instead, a number of pieces of evidence support the notion that it is group dynamics
within the municipal council that lead to higher probability of early termination for female
mayors. Specifically, we find that the likelihood that a female mayor survives until the end
of her term is lowest when the mayor interacts with an entirely male council; in regions
where unfavorable attitudes towards working women prevail, as measured by surveys about
women’s role and the female labor force participation rate; and in municipalities where no
woman had ever served as mayor in the past.
Our study makes a number of important contributions. First, it provides one of the first
estimates of the performance of women in leadership positions. Among the advantages of
2Wedefer tolater adiscussion ofthe interpretation ofthe RDcoefficient inasetting inwhichcandidates
may be selected based on observed and unobserved characteristics.
2
our approach is that we are able to observe a large sample of women in leadership positions,
and that we have, in government stability, a good observable measure of the performance
of politicians. It is well recognized that government stability is a relevant determinant
of economic growth, as the uncertainty associated with an unstable political environment
reduces investment and the speed of economic development (Barro, 1991; Alesina et al.,
1996).3 Thus, our empiricalanalysis has the advantage of bringing the study of governments
to a micro level, and allows us to better understand the complex dynamics of government
stability. Second, our analysis presents a unique opportunity to analyze the interaction
betweenthe gender of team membersand the team leaderin an important real world setting,
where one can credibly measure performance. With respect to laboratory settings, this
has the advantage of capturing any possible heterogeneity in gender dynamics in a more
geographically and demographically diverse sample.
The rest of the paper is organized as follows. In Section 2, we review the related lit-
erature. In Section 3, we describe the Italian institutional framework and the data. In
Section 4, we describe the econometric framework and discuss the conditions under which
this design identifies a parameter of interest. In Section 5 we present the main results on the
relationship betweenthe mayor’s gender and the probability of early termination,using both
linear regression and regression discontinuity methods. In Section 6 we discuss the possible
interpretations of our findings. We conclude with Section 7.
2 Related Literature
This paper is related to several different strands of research. First, it is connected to the
literature on the gender gap in wages and the underrepresentation of women in leadership
roles at the very top of the occupational distribution. Black et al. (2008) and Bertrand et
al. (2010) argue that a substantial fraction of the gender gap for highly educated women
3Thisistruealsoinourdata,where earlyterminationofalegislatureisassociatedwithlowerinvestments
and higher budget deficits in subsequent terms.
3
can be explained by differences in choice of college major, in labor force attachment and
in weekly work hours. Others have hypothesized that the underrepresentation of women
in high-powered jobs may be due to gender differences in competitive environments. Men
are more likely to select into more competitive compensation schemes (Dohmen and Falk,
2011; Niederle and Vesterlund, 2007; Niederle and Yestrumskas, 2008; Booth and Nolen,
2009), they tend to raise their performance in competitive settings (Gneezy, Niederle and
Rustichini,2003) and are better able to maintain high levelsof performance in high pressure
situations (Lavy, 2008a; O¨rs, Palomino and Peyrache, 2008).4
This paper is also related to the large and expanding literature on the choices and per-
formance of female politicians. A series of recent articles has highlighted important gender
differencesinpreferencesforpolicies. Femaleleadersinvestmoreinpublicgoods moreclosely
linked to women’s concerns, like water provision (Chattopadhyay and Duflo, 2004), educa-
tion (Clots-Figueras, 2009 and 2010), health (Rehavi, 2007), and environmental protection
(Funk and Gathman, 2008). On the other hand, Ferreira and Gyourko (2010), using data
fromU.S.municipalities,findthat thegenderof themayorisunrelatedtothesizeofthelocal
government or the composition of municipal spending. A rich literature in political science
has also investigated gender differences in legislators’ voting behavior, using mostly data
from the U.S. Congress. Studies have found that women tend to be more liberal than men
(Welch,1985; Norton, 1995), and morelikelyto support and promote women’s issues (Swers,
1998, Vega and Firestone, 1995), while Edlund and Pande (2002) and Box-Steffensmeier et
al. (2004) investigate the emergence of the political gender gap over the past few decades. 5
With respect to the existing literature, the contribution of our paper is twofold. First, it
4On the other hand, Lavy (2008b) finds no gender differences in performance in a tournament in which
contestants have more time to prepare and plan their strategies, and Manning and Saidi (2010) argue that
gender differences in the incidence of pay-for-performance schemes can account for only a small fraction
of the gender gap in the United Kingdom. Paserman (2010) finds that professional tennis players of both
genders substantially reduce their performance in high-pressure situations.
5Washington (2008) addresses some of the potential endogeneity issues with these previous studies by
examiningtheeffect ofthegenderoflegislators’children ontheirvotingbehavior: shefindsthat,conditional
on the total number of children, each additional daughter raises the propensity of members of Congress to
vote liberally.
4
sheds new light on gender interactions within hierarchical environments. To the best of our
knowledge, this aspect has been almost neglected in previous economic research, probably
becauseoftheabsenceoffielddata thatallowstheanalysisofgenderinteractionsinrelatively
smallteams. Thelimitedliteratureincorporate finance has beenableto look atthe effectsof
the share of women directors on firm performance, but the scarcity of female CEOs prevents
it from analyzing the effects of having a woman at the top of the hierarchy. Second, we
analyze an additional dimension of politicians’ effectiveness, which had not received much
attention previously.
3 Institutional Framework and Data
3.1 The Italian Institutional Framework
The Italian municipal administration (Comune) is headed by a Mayor (Sindaco), who ap-
points the ExecutiveCommittee(Giunta), and a Council (Consiglio Comunale). The Coun-
cil endorses the policies proposed by the mayor with majority rule. The functions of a
municipal administration include the provision of public transportation, some welfare (like
assistance to elderly people, nursery schools, and public housing), contracting for public
works and managing public utilities.
In 1993 the mayoral electoral system was changed from a party-ballot to an individual-
ballot election of the mayor, with some differences depending on the size of the city. In
cities with population less than 15,000, elections are held with a single ballot and plurality
rule, and the winning candidate is awarded a majority premium of at least two-thirds of the
seats in thecouncil. Inmunicipalitieswith population above15,000, electionsare heldwith a
double ballot(one for the mayor,and one for theparty list),and a runoff electionisheldonly
if none of the candidates in the first round obtained an absolute majority of the votes. In
large municipalities,the winning candidate is awarded a majoritypremiumof at least 60% of
5
the seats.6 Candidates are typically nominated by parties, although sometimes a candidate,
especially in small municipalities, may run as an independent, or set up an independent list
that includes also representatives from other parties.7 Councillors are elected with an open
list system. Voters have one vote for one council candidate in the party list of the mayoral
candidate they voted for (for small municipalities), or in one of the party lists linked to the
mayoral candidates (for large municipalities). The seats won by the mayoral candidate are
assigned to the council candidates according to the preferences they received.
In 2000, the statutory duration of the legislature was extended from four to five years.
Mayors are subject to a two-term limit, unless one of the two terms lasted for less than two
years. They can also keep their previous job, with the only restriction that their salary as
mayor is cut by half unless they take a leave of absence from their private employer.8
While most of the above institutional features are not specific to Italy (for example,
Brazilian mayors are also subject to term limits, and individual ballot elections are held
both in the US and UK), what makes the Italian municipal government peculiar is that it
has somefeaturesofboth theparliamentaryand thepresidentialsystemscoexistingtogether.
Infact,inthecaseofearlyresignationofthemayoror ofatleast50percentofthecouncillors,
anticipated elections are called without the possibility of forming a new governing coalition.
The incumbent mayor can run for reelection unless the term limit applies.
The mayor has a number of tools at his/her disposal in order to shape the governing
coalition and ensure stability. Besides targeting spending towards particular groups, the
mayor can also force any member of the Executive Committee to resign and appoint a
new member, with the replacement being subject to approval by the Council. We later
6Some institutional features differ in the regions with special autonomy (Regioni Autonome a Statuto
Speciale). We include these regions in our analysis, as the differences in institutional features are not
directly relevant for our identification strategy.
7Dal Bo´ et al. (2009) show that politicaldynasties play an important role in the choice of candidates in
the U.S.Congress, and thatmanyfemalelegislators“inherit”their seat fromhusbands, fathers andsiblings.
Unfortunately, we cannot say whether this is the case in our data, as we do not observe familylinks.
8In recent work on the pay of Italian mayors, Gagliarducci and Nannicini (2010) conducted a phone
interview survey of mayors in towns with a population between 4,900 to 5,100 inhabitants, and found that
the fraction of full-time mayors was 47%, and the weekly working hours 38 (compared to 28 for part-time
mayors).
6
examine whether there is any evidence that male and female mayors behave differently in
their handling of conflict within the coalition.
3.2 Data
We use an administrativedata set containing all the Italian mayoral terms electedfrom 1993
to 2003.9 The data set contains information on gender, age, highest educational attainment,
politicalaffiliation,andpreviousjoboftheelectedmayor,ofallthelosingmayoralcandidates,
of the members of the executivecommittee, and of the members of the council (divided into
those belonging to themayor’s coalition, and those who do not). Italso contains information
ontheexactduration andthereasons ofearlyterminationofthelegislature,andtheelectoral
results for the first and the second ballot. For eachmunicipality,we also have detailedyearly
data on population; on total revenues and expenditure (both in total and by components);
and on the percent of revenues actually collected and the percent of expenses actually paid,
which we will later use as indicators of government efficiency. Finally we have a number of
demographic and economic indicators as of 2005: disposable income after taxes per capita,
the labor force participation rate, the number of productive units per capita and the old-age
index.10
3.3 Descriptive Statistics
We have data on more than 8,000 municipalities and 18,000 mayoral terms, 6.7 percent
of which were headed by a female mayor.11 We restrict the sample only to those mayoral
terms for which we have electoral and budget information, and for which we can know with
certainty whether the legislature was terminated before completing its full term. Table 1
9Thedataset wasconstructed fromtheCensus ofLocalandRegionalAdministrators(Anagrafe Ammin-
istratori Locali e Regionali) availablefrom the Italian Ministry of the Interior.
10The labor force participation rate is the ratio of active population (15-64) over the whole population.
The old-age index is defined as the ratio of population above age 65 over population below age 14. All the
data were provided by the Statistical Office of the Italian Ministry of Interiors.
11A detailed description of mayors’ and cities’ characteristics can be found in Appendix Tables 1 and 2.
7
documents that female mayors are substantially younger and less experienced (either as
mayors or in other positions in municipal government), and more likely to have been not
employed previously. On the other hand, they are markedly more educated than their male
counterparts. Municipalities with female mayors are less likely to be in the South, have a
higher labor force participation rate, more economic activity, and are richer, but they are no
different in size relative to municipalities with male mayors. Female mayors tend to serve
in councils with a slightly higher female representation, and there are also more females
in the mayor’s coalition. This also means that councillors and coalition members are less
experienced when the mayor is female. There are no differences, however, in the average
educational attainment of the city councillors.12
Our main outcome of interest is a dummy variable indicating whether the municipal
legislature failed to complete its term for one of the following reasons: a) the resignation of
the mayor (27.56 percent of the cases);13 or b) the resignation of the majority of the council
or a no-confidence vote in the council (56.41 percent). Other technical reasons for early
termination include,among other, the death of the mayor (8.54 percent), or the mayor being
charged for a crime (0.92 percent). Since these latter events are not related to the ability of
a mayor to forge and maintain a political coalition, but rather idiosyncratic events, we code
them as zeros.
One potential concern with our dependent variable is that it may not be necessarily
informativeabout the abilityof the mayor to forge and maintain coalitions. Rather, a mayor
may choose strategically to resign early and run for re-election, in order to obtain a larger
(and more manageable) majority in the subsequent election. We do not view this scenario as
12One possible concern when using a non-random subsample of the population, such as mayors, is that
the process ofselection intopoliticsmightbe different between men andwomen,compromisingthe external
validityof our results. However, comparing the elected mayors in our sample with a random sample of the
Italianpopulation(obtainedfromthe BankofItaly’sSurvey onHouseholdIncome andWealth)reveals that
there are only small differences in key observable characteristics (age, education, and employment status).
Moreover, there does not seem to be any differential pattern of selection by gender. See Figure A1 in the
Appendix for more details.
13In 0.05 percent of these cases, the mayor was then elected in the national parliament; in 5.5 percent in
the regional government; and in 0.7 percent in the provincial government.
8
particularly likely. First, the two-term limit, the cost of campaigning, and the possibility to
losethemayoralmonthlysalary (whichin2000 wasbetween1,291 and 7,798 euros depending
on population size) act to reduce the incentives of mayors to resign voluntarily. Second, in
the case of early termination (and no binding term limit), the percentage of mayors who
will then run for re-election is only 40 percent; and, while about 55 percent succeed in being
reelected, there is no evidence that they are able to increase the size of their majority, or
to change the equilibrium within their coalition (the fraction of seats in the mayor’s party
decreases from 37 to 33 percent, but the difference is not statistically significant). Finally,
governmentinstabilityis quiteclearlyperceivedinItalyas an undesirableoutcome: the term
itself used to describe it (“government crisis”) has an unambiguous negative connotation.
Moreover, our data shows that the early termination of a legislature is associated with lower
investments and higher budget deficits in subsequent terms.
Table 2 presents the mean of the dependent variable, separately by gender and by a
number of important covariates. First, we note that experience matters a great deal in
securingacompletemandate. Mayorsintheirfirsttermorwithlessthan5yearsinmunicipal
politics are about 60 percent more likely to not reach the end of their mandate. There
are also important differences by region and by type of municipality: the probability of
early termination is much higher in the South and in large municipalities, and is smaller in
municipalities with per capita income above the median (this last variable in part captures
the large regional differences in per capita income). Large municipalities are probably more
difficult to manage, as are municipalities in the relatively impoverished Italian South. The
probabilityof earlyterminationincreasesmonotonicallyas thenumberof partiesrepresented
in the council rises: governments are less stable when there are a large number of conflicting
interests. Finally, it appears that the probability of early termination is highest for mayors
affiliated with right and center-right parties.
Strikingly, in almost all of the above subcategories we find that women are more likely
to resign early than men. Overall, six out of twenty-seven differences are also statistically
9