We have heard of the widely discussed gender pay gap. But what are actual actionable solutions to narrow it? Across Europe and beyond, policymakers are intensifying efforts to answer just that: the persistent problem of gender gaps in pay, leadership, and promotions. The EU Pay Transparency Directive, renewed debates over board gender quotas, and growing pressure for corporate diversity reporting all reflect a common concern: despite decades of progress, gender disparities within firms remain substantial (Schivardi et al. 2015). Some research shows that women ask for lower pay than men do for the same jobs, reflecting internalised labour market norms (Levy Yeyati and Gonzalez Rozada 2018). But how do we approach the cultural norms that this phenomenon stems from?

Management practices are central to firm performance and organisational outcomes (Bertrand and Schoar 2003, Bloom and Van Reenen 2011, Guiso et al. 2015). Recent research has highlighted how managers influence productivity, not only through incentives and monitoring, but also through internal job allocation (Minni 2025). At the same time, individuals’ cultural origins shape their values and economic behaviours (Bisin and Verdier 2001, Fernández and Fogli 2009, Giuliano 2021). Gender norms, in particular, are persistent and slow-moving (Alesina et al. 2013), yet they play a crucial role in shaping labour market outcomes (Bertrand 2011, Olivetti et al. 2020).

Such research raises an important question still largely unexplored: do managers transmit cultural norms inside firms? And can these norms reshape internal pay gaps and career trajectories? If so, we have evidence for the broader question of how managers can have a role in shifting long-engrained norms like the gender pay gap. In a new paper (Minni et al. 2026), my co-authors and I examine how managers’ inherited gender attitudes affect gender pay gaps within firms – and how these norms diffuse across organisational hierarchies, using several years of personnel records from a large multinational firm.

Measuring managers’ gender norms

First, we measure managers’ inherited gender attitudes. Using existing research on cultural transmission (Bisin and Verdier 2001, Fernández and Fogli 2009, Giuliano 2021), we determine a manager’s gender norms using the average gender attitudes of individuals from the same country of origin and birth cohort in the World Values Survey. This measure is useful in capturing whether a manager comes from a cultural background with more progressive or more conservative views about women’s roles in society. We assume that these inherited attitudes would also be present in a manager’s workplace values.

We then leverage a multinational firm’s rotation policy that regularly assigns foreign managers to teams across offices and countries. These rotations allow us to compare gender pay gaps before and after employees are exposed to managers from more versus less gender-progressive cultural backgrounds.

We find that exposure to a foreign manager on rotation generally improves team outcomes along lines of pay, promotion, and career success relative to teams having a manager from the local culture. This likely has to do with the fact that managers who volunteer or are selected for international rotations tend to be those with early career success. With that understood, how does exposure to a gender-progressive foreign manager affect pay outcomes of women employees?

Do managers’ norms affect gender pay gaps?

We find that a foreign manager with more progressive views on gender – roughly the difference between an American and a Chinese manager, or between a Chinese and an Indian manager – reduces the gender pay gap by 4.9 percentage points. This corresponds to an 18% decline relative to the baseline gap. This comes at no cost to the pay of male employees.

The impact is particularly strong in offices located in countries with more conservative prevailing gender norms. In these environments, progressive managers appear to have more scope to reshape workplace practices. Unlike local managers, foreign managers are cultural outsiders who can approach their roles with fewer social constraints and thus have greater freedom to introduce new ideas.

Importantly, these effects persist even after the foreign manager leaves the office. Figure 1 shows that the reduction in gender gaps remains long after the managerial rotation ends, indicating a lasting imprint on internal practices. We also find no adverse effects in teams exposed to a foreign manager from a culture with more gender-conservative cultural norms.

Figure 1 The impact of foreign managers’ gender norms on the gender pay gap, over time

The extent of changing norms

This narrowing of the gender pay gap is driven by women workers being promoted into better-paying roles. There is also evidence of lateral reallocation across tasks, suggesting that managers may match female employees to jobs that are better fits. Additionally, women employees are much less likely to leave the firm once exposed to a gender-progressive foreign manager.

Survey evidence from within the firm further indicates that managers with more progressive gender norms improve perceptions of managerial effectiveness and workplace morale. Taken together, these findings suggest that managers influence gender inequality by reshaping promotion patterns, job allocation, and internal career trajectories.

Norms beyond the team

We examine whether this cultural transmission has effects beyond the individual team. Do we notice norms changing across the firm? We distinguish between two types of cultural transmission. Transmission can be horizontal (affecting other peer managers from the local culture) and vertical (affecting subordinate managers from the local culture that directly report to the foreign manager).

Our research shows that both forms of transmission result in improved pay outcomes for female employees. Subordinate and peer local managers improve pay outcomes for their female reports after interacting with a gender-progressive foreign manager on a rotation. The magnitude of these spillovers is roughly half of the direct effect on the foreign manager’s own team.

These cultural norm shifts radiate from the foreign manager and across many other managers and teams, persisting after the foreign manager’s rotation ends. Put simply, gender-progressive managers inspire local managers to promote women at higher rates. This also turns into a more equal representation of women in managerial positions, again highlighting the shifting of cultural norms. Figure 2 illustrates these horizontal and vertical transmission effects.

Figure 2 Cultural transmission along and across the hierarchy

Evidence beyond one firm

A natural caveat of this study is whether the results we find from this one multinational corporation extend to other firms. We also analyse Brazilian linked employer–employee data from 2009 to 2021. Similarly, we track exposure of local teams to foreign managers with different gender norms.

Firms exposed to managers from more progressive countries exhibit smaller gender pay gaps among high-skilled white-collar workers (around 3%) and higher female representation in managerial ranks. These correlational results echo the within-firm evidence and suggest that managerial norms matter for gender outcomes more broadly.

Takeaways

Most policy debates on gender inequality focus on formal rules: pay transparency, quotas, anti-discrimination enforcement, or hiring targets. These tools matter, but primarily for hiring and wage-setting rather than as measures for existing employees.

Our findings highlight a different mechanism. The effects we document are not driven by hiring or workforce composition, and they are not simply short-run pay adjustments. Instead, managers influence promotion paths, internal job allocation, and workplace perceptions, and these changes persist even after the manager leaves.

Foreign managers on international rotations enter teams with their own preconceived cultural mores and much more freedom to impart change. They transmit norms through everyday decisions: whom they promote, how they allocate tasks, and how they define leadership and performance. These practices then spread to peer managers and subordinate managers, radiating outward within the company to reach those who never even interacted with the original manager and potentially leaving behind real change in cultural norms.

In a globalised labour market where managers frequently rotate across borders, firms are not only transferring knowledge and skills; they are also transmitting social norms. Policies that focus solely on formal rules may therefore overlook a powerful internal driver of inequality: managerial culture. Understanding how norms spread within organisations may help explain why some firms close gender gaps faster than others, even while regulation remains the same.

References

Alesina, A, P Giuliano, and N Nunn (2013), “On the origins of gender roles: Women and the plough”, Quarterly Journal of Economics 128(2): 469–530.

Bertrand, M (2011), “New perspectives on gender”, in Handbook of Labor Economics, Vol. 4B, Elsevier.

Bertrand, M, and A Schoar (2003), “Managing with style: The effect of managers on firm policies”, Quarterly Journal of Economics 118(4): 1169–208.

Bisin, A, and T Verdier (2001), “The economics of cultural transmission and the dynamics of preferences”, Journal of Economic Theory 97(2): 298–319.

Bloom, N, and J Van Reenen (2011), “Human resource management and productivity”, in Handbook of Labor Economics, Vol. 4B, Elsevier.

Fernández, R, and A Fogli (2009), “Culture: An empirical investigation of beliefs, work, and fertility”, American Economic Journal: Macroeconomics 1(1): 146–77.

Giuliano, P (2021), “Gender norms and economic outcomes”, Annual Review of Economics 13: 663–87.

Guiso, L, P Sapienza, and L Zingales (2015), “The value of corporate culture”, Journal of Financial Economics 117(1): 60–76.

Levy Yeyati, E, and M Gonzalez Rozada (2018), “The ‘ask gap’: New evidence on the supply side of the gender wage gap”, VoxEU.org, 7 September.

Minni, V, K-T Nguyen, H Sarsons, and C Srebot (2026), “Managers and the cultural transmission of gender norms”, working paper.

Minni, V (2025), “Good managers, better matches: Job allocation effects on worker productivity”, VoxEU.org, 10 February.

Olivetti, C, E Patacchini, and Y Zenou (2020), “Mothers, peers, and gender-role identity”, Journal of the European Economic Association 18(1): 266–301.

Schivardi, F, M Macis, A Moro, and L Flabbi (2015), “Female executives and gender wage gaps”, VoxEU.org, 24 April.