New 4Is Working Paper: “Women in Top Incomes – Evidence from Sweden 1974 – 2013”

While the research into top incomes has been growing in recent years, one dimension has often been overlooked: The share of women across top income groups. A new 4Is working paper authored by Anne Boschini, Kristin Gunnarsson and Jesper Roine takes a look at exactly this group in order to explore the gender dimension of top incomes. They ask what the share of women across top income groups is, how it has changed over time, how women’s income composition differs from that of men, and what the role of other factors such as age, education, marital status, and wealth is. The working paper thus adds to existing literature which mostly studies gender inequality in the labor market by focusing at executive compensation and the so-called “glass-ceiling”.

The authors approach these questions using the case of Sweden, often considered a pioneer when it comes to gender equality and the integration of women into the labor market. Their analysis is based on a micro panel data set with yearly observations of individual incomes over the period from 1974 to 2013.

The study has five main findings: First, the share of women in the top decile has steadily increased since the 1970s. In the distribution of total income, the share of women in the top 10 group more than doubled from about 12 per cent in 1974 to about 28 per cent in 2013. A second finding is that, in terms of income composition, women in the top rely more on capital incomes than men. Third, the authors find that women are more likely to exit the top group from one year to the next. This is mainly related to a very different impact of realized capital gains between men and women. Fourth, top income women on average have more (taxable) wealth than top income men, which is in line with top income women having higher shares of capital income. Fifth, the authors find that women in the top are not very different to men in terms of individual characteristics such as age and education. Family situations are, however, markedly different. A larger share of top income men are married compared to women, and they are often married to women with lower incomes. Married top income women, on the other hand, are almost always married to men who are also in the top of the distribution, and virtually none of them to men with low incomes.

Overall, the authors conclude that differences in the role of capital, but also the very different family compositions for top income men and women suggest that many of the findings in the top income literature have a clear gender component. Understanding gender equality in the top of the distribution requires studying not only earnings and labor market outcomes, but also other aspects of top income men and women.

For the full paper, go to welfarestatefutures.org/working-papers