The Importance of Gender Data for Market Analysis

According to University of Cambridge Economist Diane Coyle, “There is a vast amount of missing data about the state of the world. Sampling error or bias, the character of data collection, and omitted variables (unknown unknowns) all mean no data can be taken at face value.” A significant amount of the data that is missing from economics concerns gender differences.

When S&P Global began examining the effect of gender on companies and markets several years ago, our databases lacked gender as a variable. S&P Global is one of the leading providers of company and market information in the world, but to understand the role of gender in performance, education, board and C-suite participation, or CEO communication style, we needed to compile gender data based on extracting pronouns and given names from company reports. Even a global leader in data and analytics had to step up to fill the gap in gender data.

There is an impact when gender data is missing. As the writer Caroline Criado Perez argues in her groundbreaking 2019 book Invisible Women: Data Bias in a World Designed for Men, the absence of gender data leads to a default assumption of maleness. That also means a default assumption of men as CEOs and employees. Such an assumption affects expectations around workplace culture, communication styles, benefits and differing pay in different sectors of the economy. When we disaggregate gender data, we see significant disparities.

Much of the rhetoric around gender disparities has changed in recent years. Most companies affirm a commitment to building gender parity in the C-suite, in pay levels and across the workforce. In the absence of gender-disaggregated data, however, these positive intentions can fall short by focusing on the wrong lever or addressing the wrong underlying reasons for an existing gap. A company that attempts to hire more women without a general understanding of the factors that affect women’s job satisfaction will struggle to find suitable candidates and achieve gender parity. A board that wants to add women to the C-suite but does not understand gender differences in communication style and educational background will likely struggle to find the right person. In a world where most CEOs are men, the communication styles and backgrounds of men tend to dominate as a matter of inertia. As the global economy is reshaped by trends in technology, climate, ageing population and more, future jobs and growth sectors will also change. It's critical to determine how women can be positioned to lead and contribute to this transformation.

A Macro-Level Sectoral View

Most current research on gender disparities only looks at data on an aggregate, economy-wide level. Such research represents an important first step in understanding the gender pay gap, women’s labor force participation rates, and gender imbalance in the C-suite and boardroom. However, aggregate data can also obscure the true conditions by combining sectors that vary greatly in terms of labor force participation by women.

One of this report’s companion studies, entitled “Gender Disparities In The Labor Force Across Sectors Fuel Wage Gaps In North America,” looks at the variance in men’s and women’s employment across 16 economic sectors in the United States, Canada and Mexico, showing how gender wage gaps have persisted even as more women have entered the workforce. Sectors where women outnumber men, like health care and education, are services-based and less capital intensive, which means that these sectors’ economic output per worker appears lower. Sectors where men outnumber women, such as manufacturing, are more capital intensive, making these sectors appear to feature higher labor productivity, as measured by economic output per worker. In practice, this means that the sectors where men outnumber women are considered more economically valuable, which translates into a rough proxy of higher wages for that sector. Averaged across the whole economy, the implied wage gap is around 21% to 22%. No one is arguing that teachers are less valuable for society than manufacturing workers, but manufacturing attracts capital in a way that education does not, even though education is fundamental to preparing future workforces and innovation for every industry.

The sector data on employment and an implied wage gap for men versus women holds true for both the United States and Canada. However, Mexico differs from its more affluent North American counterparts. The implied wage gap in Mexico stands at 9.9%, with equality benchmarks helping manufacturing to rank as a leader in employing men and women equally.

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In any given market, based on gender data in the aggregate, it might appear that adding more women to the workforce would help address the gender wage gap and increase GDP. Yet sectoral level data shows that it matters where women work. Adding women in the manufacturing or information technology sectors will have a greater economic impact than adding more women as teachers or nurses.

The late economist Mancur Olson once made the argument that a tailor from Haiti who emigrates to the United States immediately becomes more economically productive. According to conventional definitions of productivity, the tailor’s output is the same. But according to an economic definition of productivity, the tailor can now sell clothes for more money, resulting in an increased contribution to GDP. By the same token, when a woman leaves teaching and takes a job in the technology sector, she becomes more economically productive; not coincidentally, she also may earn significantly higher compensation.

Given teachers’ and nurses’ actual societal and ultimately economic contributions, it is valid to argue that they should be financially valued more than they are and receive higher salaries. But for now, capital intensive sectors generally earn higher wages, and those sectors employ more men than women. Our study’s authors argue that one solution may be to eliminate biases or structural impediments that prevent either women or men from entering their field of choice. Absent rigid societal preconceptions and institutional biases, careers for more men as nurses and more women as engineers may balance the sectoral distribution of men and women.

Data on Women in Technology and Energy

One problem with suggesting that gender inequality will be addressed simply by having more women enter high-wage sectors where men dominate is that this approach ignores the structural impediments that keep women out of these jobs. Researchers at S&P Global have recently studied two high-wage sectors that are dominated by men — technology and energy — to understand what factors influence career satisfaction or dissatisfaction for women in these sectors. The first report resulting from this research, “Women in Technology: Key strategies to retain and attract diverse talent,” is based on an online survey, conducted from Nov. 2 to Dec. 20, 2021, of 626 US women working in technology fields. The second report, entitled “Women in Energy: More utility leadership roles, but parity remains far off,” was published in September 2023 based on a survey of 648 individuals across 119 publicly traded power and utilities companies.

Among the common factors noted by women across both studies was the importance of visible women executives, C-suite or board members. Women in industries dominated by men struggle with the perceived need to be women pioneers. However, if there are already prominent women executives at a given company, women believe the company offers an established career path for women to follow. For women in energy, these types of role models are few and far between. In the US, only 22% of executives at publicly traded power and utilities companies are women. In Europe, that number is slightly higher at 23%. Women in technology also do not see many executives who look like them. According to our survey, women working in technology estimate that only 32% of senior IT leadership at their company are women.

When asked to rank the factors that led to greatest career satisfaction, women in technology ranked “flexible work hours/work from home” as the single most important condition. Many technology companies have engaged in a backlash against the remote work practices that became more common during the pandemic. Unfortunately, these same companies may not have weighed how this approach works counter to efforts to increase their percentage of women employees. Despite some progress, women remain the primary caretakers of young children and elderly parents in most families. Remote work, which many executives may perceive as representing a lack of commitment, may be the only way that some women can balance their responsibilities.

S&P Global has partnered with the American Association of Retired Persons, or AARP, to research family and parental leave policies and their impact on employers and employees across all sectors. While the research found that a growing percentage of companies offered parental leave and flexible work schedules, the conflicting demands of work and family were increasing stress for most family caregivers, the majority of whom were women.

The other factors that ranked highly for career satisfaction among women in technology included women as role models in senior leadership positions, opportunities for career advancement, participation in interesting projects, and equitable compensation. Together these factors paint a picture of women in technology who are unsure about receiving equal opportunities, compensation, and promotions. These concerns are all the more understandable given that one in three respondents reported being subjected to sexual harassment in their industry and one in three also reported bullying behavior from managers and co-workers. Sizable percentages reported being subject to inappropriate language, seeing men paid more to do the same job, having men take credit for their work, and being excluded from major project teams. Being a “pioneer” in this type of hostile environment holds little appeal for many women.

Compensation remains a big issue for women in men-dominated sectors like technology and energy. Although the sectoral analysis revealed that some of the gender pay gap is due to differences in capital intensity in specific industries, wage gaps persist within industries as well. According to the International Energy Agency, wages for women employees in the energy sector are nearly 20% lower than for men employees. This may help to explain why equitable compensation ranks highly as a source of career satisfaction for women in the technology survey. Everyone worries that they are not being paid the same as their co-workers. Women know that, likely, they are not.

The structural impediments that keep women out of sectors dominated by men can include inequitable compensation practices or management that is unsympathetic to remote work. In balance, these factors should be addressable by companies that are committed to hiring a diverse workforce. But other structural impediments like sexual harassment, bullying and an absence of women executive role models are more insidious and more difficult to overcome. The unfortunate solution, too often, is an expectation that women should adopt a man's stereotypical approach to work — tolerant of bullying, little work/life balance, and an aggressive approach to compensation discussions. Unfortunately, this expectation that women should be more like men holds true on both sides of the C-suite.

Data on STEM Education

Science, technology, engineering and math (STEM) fields offer well-paid jobs. In a global economy that is increasingly digitized and technology-dependent, professionals with STEM skills will likely be in high demand and more adaptable as the nature of jobs evolves. In addition, many of the capital-intensive sectors traditionally dominated by men are STEM-focused, including information technologies, mining, financial services and utilities. One possible solution to gender inequality in labor force participation and compensation is for more women to get STEM degrees. This appears to address the complaint of many hiring managers in these sectors who insist that they don’t see enough qualified women applicants. This argument seems to suggest that if only women would study more computer science and less humanities, the problem of gender inequality would be resolved.

Yet let’s leave aside that simple version of the STEM debate and instead focus on a group of women and men who are undeniably qualified to work in their industries — public company CEOs. As described in a paper entitled “Studying the STEM Education Gap Among CEOs Globally,” researchers at S&P Global have examined the educational backgrounds of more than 2,500 public company CEOs to identify patterns related to gender and educational background. The study aimed to understand how women CEOs’ backgrounds compared to their peers who are men, and to gauge the role of a STEM education in achieving the highest levels of career success. For the purposes of this study, the researchers defined STEM education to include degrees in economics, finance or accounting, in addition to degrees in science, technology, engineering or mathematics.

The researchers anticipated some degree of variation in CEO education based on differences between industries. After all, the CEO of a fashion brand, whether a man or a woman, may not need a degree in chemistry or applied mathematics. For the purposes of this study, the researchers categorized companies by STEM intensity according to their sectors’ levels of STEM employment. For example, software companies were defined as high STEM intensity, while apparel companies were defined as low STEM intensity.

A challenge in studying the differences between men CEOs and women CEOs lies in the relative scarcity of the latter. At the 2,507 companies analyzed as part of this study, only 198 CEOs were women. Statistically, this means that data on women CEOs is inherently subject to greater variability caused by outliers. In this case, the imbalance in the data on women is caused by an absence of women in the CEO role, rather than a lack of commitment to collecting gender data.

Unsurprisingly, the study found that most CEOs, whether men or women, had a STEM educational background. The prevalence of men CEOs’ and women CEOs’ STEM educational background depended on the STEM intensity of their sector. For example, at high STEM intensity companies, 76% of men CEOs and 68% of women CEOs had received a STEM education. At low STEM intensity companies, 57% of men CEOs and 41% of women CEOs had STEM educational backgrounds. For mid-high and mid-low STEM intensity companies, the percentages of STEM degrees for men and women CEOs were essentially statistically identical at around 65%.

Table 1
Percentage of women and men CEOs with STEM education by STEM intensity

For sample details, see methodology note in the related report.
Sources: S&P Global Market Intelligence, S&P Global Ratings.

One way to interpret this data is to conclude that a STEM educational background is beneficial for reaching the highest levels in the corporate world, regardless of the STEM intensity of the sector. This would reinforce the theory that closing the STEM education gap is a necessary condition for overcoming gender disparities. But there is another way to interpret this data.

Revisiting the data for low STEM intensity companies, we see that only 44% of women CEOs have STEM educational backgrounds compared to 57% of men CEOs. One possible conclusion may be that companies are over-selecting for CEOs (particularly men CEOs) with a STEM educational background in sectors where STEM intensity is low and that educational background might be unnecessary. One explanation for this selection bias is that boards are unconsciously selecting for men as CEOs and that men are more likely than women to have STEM degrees. This would mean that the correlation between STEM education and CEO position reflects institutional gender bias rather than a necessary qualification for the role. Further research would be required to clarify these differences.

In addition, for certain sectors, such as energy, automotive, financial services, and semiconductor technology, the share of women CEOs with a STEM degree is higher than the share of male CEOs with a STEM degree. This could suggest that in such sectors, it is not only important to have a STEM educational background, but may be disproportionately important for women.

Women CEOs have lower percentages of STEM education than men CEOs. This means that women CEOs are more likely to have majored in the humanities and social sciences, fields that emphasize communication and socialization over hard numbers. We could expect that this difference may manifest in different communication styles between men and women CEOs. Depending on the nature of those differences, we might conclude that STEM education is not always the net positive for corporate success that it is often believed to be.

Data on Gender Differences in CEO Communication Styles

In 2021, and again in 2022 and 2023, researchers at S&P Global worked in partnership with a member of the International Human Resources Management faculty at Université Paris Panthéon-Assas to analyze differences in communication and leadership styles among men and women CEOs. The studies used natural language processing to perform sentiment analysis for earnings call transcripts for the leaders of nearly 5,000 companies in the S&P Global Broad Market Index. Using the S&P Global Broad Market Index made the studies uniquely global in scope compared to others, which tend to focus on the US or Europe. The first study, “Leadership in Turbulent Times: Women CEOs During COVID-19,” was conducted from March 9, 2020, to Dec. 31, 2020, during the early period of the COVID-19 pandemic. A follow-up study, “Women CEOs: Leadership for a Diverse Future,” includes earnings call transcripts through the first quarter of 2022.

Both studies found significant differences between communication styles among men and women CEOs. Women CEOs were found to display more diversity, empathy and adaptability in their leadership and communication styles. On average, women CEOs had higher scores for positive sentiment, as well as high scores for emotions in the categories of trust and anticipation. Particularly during the early days of the pandemic, men CEOs had higher scores for language in the categories of surprise, anger and sadness. Men CEOs tended to use more words like “EBITDA,” “profit” and “acquisition.” Women CEOs were more likely to use words like “customer engagement,” “mission” and “vision.” Women CEOs were more likely to talk about clients, while men CEOs were more likely to talk about metrics.

Women CEOs’ communication styles as revealed in the study are more consistent with academic definitions of authentic leadership, which inclusively promotes team diversity. Yet despite the emphasis women CEOs place on inclusion and mission, versus the emphasis men CEOs place on metrics and profit, the study found no significant difference in company performance between men and women CEOs. Women CEOs performed as well as men CEOs according to traditional financial metrics. Women just placed more emphasis on interpersonal dynamics. The report found that women CEOs display characteristics that can help leaders navigate a rapidly evolving and uncertain environment by catering to a broader range of stakeholders and displaying more empathy, inclusivity and adaptability, particularly in periods of crisis like the pandemic. 

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Implications

There continues to be significant missing data related to gender and the markets. Studies by S&P Global and others have begun to fill the void, but important questions remain to be answered.

Sector-level data on gender disparities points the way toward a more sophisticated understanding of challenges to gender equality, including in key sectors for the multifaceted transitions that will define the coming decades. Are the implied wage gaps simply a product of overall capital intensity in different countries? What do wage gaps look like within sectors and do the actual wage gaps vary according to a given sector’s overall gender profile? Are women in sectors dominated by men paid much less for the same work? If so, then merely adding women to these sectors may not close the wage gap.

Our surveys on women in tech and energy start to fill in this sectoral information. We can better understand how women in men-dominated sectors experience their work and what concerns they have. Ideally, sector-based comparisons of companies that have adopted and retained remote-work options versus those that have instituted stricter return-to-office policies would help to understand how those decisions have affected companies’ workforces across genders.

Discussions of the STEM education gap tend to be unusually fraught since they can appear to blame women for their lesser presence in economically and strategically high-profile, well-compensated sectors. S&P Global’s research on CEO educational background begs the question of the necessity of STEM education for executives in non-STEM-related fields. There must be a way to differentiate necessary qualifications from gender-based hiring preferences. One way to establish this distinction might be to look at CEO communication style and CEO performance in light of educational background. In some cases, hiring expectations for a STEM educational background might perpetuate continued institutional bias toward men executives.

Across the board, more data disaggregated by gender is necessary to understand the way economies, markets and companies work or fail to work for half of humanity. In the words of Caroline Criado Perez, “For too long we have positioned women as a deviation from standard humanity and this is why they have been allowed to become invisible.” At S&P Global, the work continues.

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