Gender diversity, productivity, and wages in private Egyptian firms

ABSTRACT

Womenʻs employment is not evenly distributed across sectors and firms and this variance in gender diversity can impact firmsʻ productivity and wages in both positive and negative ways according to theory. Using new economic census data from Egypt, this paper explores the relationship between gender diversity, productivity, and wages. Our first finding is that gender diversity is positively associated with productivity and wages in the knowledge-intensive service sector. Our second finding is that there is a negative or no association between gender diversity and productivity and wages among less knowledge-intensive service and both high- and low-tech manufacturing firms. These relationships are robust across different industry classifications and measures of diversity.

KEYWORDS:

• Gender diversity
• firm productivity
• wages
• Egypt

JEL CLASSIFICATION:

• J16
• J23
• L22
• M51

Acknowledgments

The authors acknowledge the financial support provided by the Economic Research Forum as well as invaluable comments from Ragui Assaad, Caroline Krafft, Rana Hendy, Chahir Zaki and the participants of an ERF Workshop. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations or those of the executive directors of the World Bank or the governments they represent. All errors remain with the authors.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 The normalized Herfindahl index is bounded between zero (diversity) and one (dominance of one group).:

2 This index can be used to measure diversity within firms. For more information, see Schneider and Eckl (2016) and Upadhyay and Zeng (2014).

3 The relationship between Share of Females and Herfindahl is presented in Figure A1 in the appendix using the 4-digit industry definition.

4 The Sectors Classifications are presented in Tables A1, A2, A3, A4 in the appendix.