Beyond the glass ceiling: Does gender matter?

With Renée Adams, UQ Business School & ECGI

The representation of women in top corporate officer positions is steadily increasing. However, little is known about the impact this will have. A large literature documents that women are different from men in their choices and in their preferences, but most of this literature relies on samples of college students or workers at lower levels in the corporate hierarchy. If women must be like men to break the glass ceiling, we might expect gender differences to disappear among top executives. In contrast, using a large survey of directors, we show that female and male directors differ systematically in their core values and risk attitudes. While certain population gender differences disappear at the director level, others do not. Consistent with the findings for the general population, female directors are more benevolent and universally concerned, but less power-oriented than men. However, they are less traditional and security-oriented than their male counterparts. Furthermore, female directors are slightly more risk-loving than male directors. This suggests that having a women on the board need not lead to more risk-averse decision-making.

Link to paper

How do Electoral Systems Affect Fiscal Policy?

Evidence from State and Local Governments, 1890 to 2005

With Christina Gathman, University of Mannheim

Using a new data set from 1890 to 2000, we estimate how the adoption of proportional representation affects policies in Swiss cantons. We show that proportional systems shift spending toward broad goods (e.g. education and welfare benefits) but decrease spending on targetable goods (e.g. roads and agricultural subsidies). We find little evidence that proportional representation increases the size of government. We also demonstrate that compositional changes of the legislature, i.e. party fragmentation and better representation of left-wing parties, are associated with more spending. The direct electoral incentives of proportional rule appear to reduce government spending.

Link to Paper

Does Direct Democracy Reduce the Size of Government?:

New Evidence from Historical Data, 1890-2000

With Christina Gathman, University of Mannheim

Using a new historical dataset of all Swiss cantons from 1890 to 2000, we estimate the causal effect of direct democracy on government spending. Our analysis is novel in two ways: first, we use fixed effects to control for unobserved heterogeneity across cantons; second, we combine a new instrument with fixed effects to address the potential endogeneity of institutional reform. We find that direct democracy has a constraining, yet moderate effect on canton spending. Our instrumental variable estimates suggest that a mandatory budget referendum reduces canton expenditures by 9 percent. A decline in the signature requirement for the voter initiative by one percent reduces canton spending by 2.2 percent. In contrast, we find no evidence that direct democracy at the canton level results in higher local spending or a more decentralized government.

Link to paper

Revisions requested by the Economic Journal

Gender Gaps in Policy Making:

Evidence from Direct Democracy in Switzerland

With Christina Gathman, University of Mannheim

In spite of increasing representation of women in politics, little is known about their impact on policies. Comparing outcomes of parliaments with different shares of female members does not identify their causal impact because of possible differences in the underlying electorate. This paper uses a unique data set on voting decisions to shed new light on gender gaps in policy making. Our analysis focuses on Switzerland, where all citizens can directly decide on a broad range of policies in referendums and initiatives. We show that there are large gender gaps in the areas of health, environmental protection, defense spending and welfare policy which typically persist even conditional on socio-economic characteristics. We also find that female policy makers have a substantial effect on the composition of public spending, but a small effect on the overall size of government.

Link to paper

A larger version of the paper also circulated under the title "What Women Want: Suffrage, the Gender Gap in Voter Preferences and Government Expenditures". SSRN working paper

Estimating the Effect of Direct Democracy on Policy Outcomes: Preferences Matter!

With Christina Gathman, University of Mannheim

Previous studies have found large negative effects of direct democracies on government spending. Since they do not control for differences in the taste for government, these estimates suffer from omitted variable bias. Using unique voting data from Switzerland, we document substantial preference heterogeneity across direct democratic regimes. Conditional on voter preferences, the effect of direct democracy on government expenditures declines by more than 40 percent compared to earlier estimates. After controlling for heterogeneity in preferences, we estimate that having a mandatory budget referendum reduces government expenses by 12%. Therefore, institutions still matter, but to a smaller degree than previously thought..

Link to paper

Revisions requested by the American Political Science Review

n Political Science Review