The share of female executives in finance has increased, but their earnings still lag far behind male executives

The share of female managers in finance has increased significantly in Finland, but their earnings have not caught up with those of men, shows Saara Vaahtoniemi’s doctoral thesis in the field of economics.

At the beginning of the 1990s, the share of women in management positions in the financial sector in Finland was only 15%, while by the 2010s the share of female managers had risen to almost 50%. However, this is not reflected in their earnings, which lag far behind male executives.

– The earnings of female managers in finance are on average 15% lower than those of male managers, says Vaahtoniemi who will publicly defend her doctoral thesis on Friday, September 30 at the University of Vaasa, Finland.

Occupational segregation is a major challenge for equal pay in the financial sector

The financial sector in Finland pays its employees salaries about 20% higher than other service industries. This wage premium in the financial sector is lower in Finland than it is, for example, in the United States or the United Kingdom. Even though women are the majority in finance, the highest incomes are concentrated among men. This is largely explained by the differences in the training of men and women, which then translates into professional segregation within finance. The majority of women in finance work at the administrative level.

Professional segregation of men and women is also present in management positions.

– Women work as managers of marketing teams, while men are more often managers of investment teams, where salaries are significantly higher than in marketing, explains Vaahtoniemi.

Tertiary education is positively associated with promotion to leadership positions for both men and women. However, salary increases associated with promotions are greater for men than for women at all hierarchical levels. Men are also overrepresented in promotions from clerical to expert positions, as the share of men in clerical jobs is very low.

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