Essays in Labor Economics and Corporate Governance

Abstract

The goal of this dissertation is to understand the absence of women from executive and high-earning positions, with a special focus on the corporate environment. In the first chapter, I analyze the role of news media towards explaining why women in top executive roles in the United States face more unstable appointments relative to their male counterparts. To improve female representation at the top of the firm, several European countries mandated gender quotas on corporate boards. In the second chapter, I analyze a board gender quota mandated on Italian listed companies and its effects on the composition of the board and firm performance. Family responsibilities are among the most important factors that prevent women from reaching high-earning positions. In the third chapter, I broaden the scope of my investigation to high-skill women in the United States, and provide explanations for the very large increase in childcare hours spent on young children by high-skill mothers of the recent generations. The first chapter, “Media Focus, Executive Turnover, and Female Leadership”, analyzes how the tendency of news media to focus on negative events affects executive turnover in publicly listed firms in the U.S., and to what extent negative media focus explains the relatively higher incidence of turnover for women in top executive roles. Negative media focus implies that news reporting decisions can produce downward-biased public beliefs on firm performance. From the standpoint of a rational board, pessimistic public beliefs on firm performance may affect the expected benefit of retaining a CEO, and in turn, turnover decisions. Linking CEO positions to firm-level news, I provide evidence that the negative focus is higher when a company is led by a woman or an outsider CEO. Counterfactual simulations from a model of executive turnover with event-dependent media focus show that the higher negative focus explains around 15% of the differential turnover rate in female-led firms, even when women are as effective at managing the firm as their male counterparts. In the second chapter, “Do Board Gender Quotas Matter? Selection, Performance, and Stock Market Effects”, co-authored with Giulia Ferrari, Paola Profeta, and Chiara Pronzato, I analyze the effects of a gender quota mandated on corporate boards of Italian listed companies in 2013. Exploiting staggered board elections, we find that quotas are associated with a new selection of board members – characterized by higher education and lower age – and no significant costs, neither on firm performance nor on the stock market. In the third chapter, “Revisiting the Childcare Gap Between High- and Low-Skill mothers”, I show that information diffusion on the importance of early child development has been growing fast starting from the mid-1990s. At the same time, childcare hours have increased, especially for mothers of very young children and the high-educated. I argue that information diffusion on the importance of early investments coupled with increasing income inequality plays an important role towards rationalizing some of the trends in childcare time and the widening of the education gradient in childcare hours at different ages of the child’s lifecycle.