magazine issue 12 2019 / Issue 42: Gender Special Issue

What are the positive and negative side effects of gender quotas?

• written by Angela Dorrough, Christa Nater & Monika Leszczyńska
• edited by Amanda Sesko & Matthew Baldwin

To decrease inequality between men and women in the workplace, multiple European countries have introduced legislated quota regulations in favor of women. Since 2016, a gender quota has been entrenched in German law followed by a significant rise in the representation of women in target positions. But do quota regulations have additional effects on everyday work life? This article presents empirical research on positive and negative side effects of gender quota regulations. We discuss for instance effects on women’s interest in leadership positions, the performance evaluation of “quota women“, as well as group work in quota-based created teams.

What are the positive and negative side effects of gender quotas?

In order to increase women’s representation in leadership positions, many countries have established gender quotas. This measure requires that a predetermined share of women will be achieved in a target group such as corporate boards within a defined period of time. For instance, in 2016, Germany set gender quotas for corporate boards in the private sector, which resulted in a significant increase in the proportion of female board members. Recently, California passed a bill requiring publicly listed companies with their headquarters in California to have at least one female board member by the end of 2019. But do gender quotas have any further impact on everyday professional life? In this article we present scientific findings regarding the positive and negative side effects of gender quotas and discuss how quotas might affect several aspects of career life such as women’s interest in leadership positions, the evaluation of so-called quota women’s performance, and the cooperation in teams that were created on the basis of a quota.

The number of employed women in Europe has increased steadily. In the majority of European countries, the proportion of women holding a university diploma is higher than that of men[i]. Despite these developments, women often face barriers on their career paths and are underrepresented in leadership positions. For example, women occupy fewer professorships[ii] and are far less represented on corporate boards[iii] than their male counterparts. The latter is illustrated in Figure 1.

Gender distribution of supervisory board members in 2017. The y-axis shows the percentage share in supervisory board positions, with individual countries displayed on the x-axis. An orange dot represents female members; a blue dot represents male members. The closer the two dots, the greater the gender parity in the respective country.

Source: European Institute for Gender Equality, 2018.

In 2017, about 31% of non-executive directors (supervisory board members) in the United Kingdom were female, while approximately 69% were male. In Norway – a country that established a mandatory gender quota as early as 2006 – this discrepancy was considerably smaller (approximately 42% vs. 58% respectively).

Throughout the last decade, various measures aiming to overcome the existing underrepresentation of women in leadership have been suggested, discussed and implemented. Besides the anonymization of job applications and special career training for women, obligatory gender quotas have been introduced and become a subject of controversial discussion. The strength of a gender quota lies in its effectiveness, as the percentage of women in specific sectors is raised within a defined time period. For example, since the adoption of the gender quota in Germany in 2015, the percentage of women in supervisory boards in the 200 largest corporations has increased from 19.7% to 24.6% in 2017 (see Figure 2).

Percentage of women in supervisory boards of the 100 or 200 largest German enterprises, respectively, from 2006 to 2017. The y-axis shows the percentage of women and the x-axis the year. The light blue line shows the 100 largest German enterprises (“Top 100 Unternehmen”) whereas the dark blue line shows the 200 largest German enterprises (“Top 200 Unternehmen”).

But how do gender quotas affect various aspects of professional life? In the following, we will give an overview of positive and negative side effects of gender quotas.

Do quotas affect the willingness to compete with others?

Imagine this: College students were invited to a research laboratory and then divided into groups of six, with an equal number of men and women in each[iv]. The students were asked to solve math problems, for which they were rewarded either based on their individual or their relative performance within the group (that is, in a tournament). At the end of the tournament, two winners received a high reward for their performance. Some students were provided with an additional piece of information: Namely that in the tournament at least one woman will be chosen to be a winner irrespective of her performance; in other words, a gender quota would be used for winner selection. Other students did not receive this information and the tournament took place without any preferential treatment of women. Based on this information, the students decided whether they wanted to be rewarded individually or in competition with other group members. The results showed that when there was no gender quota, men were more likely to enter the competition than women. In contrast, the quota selection increased women’s interest to compete and did not have any effect on men. This diminished the gap between the number of men and women who chose to participate in the tournament. Interestingly, the performance of the students was similar in both situations – the winners of the competition solved a similar number of math problems with and without gender quotas. This example shows that a gender quota can have positive side effects: Women were more likely to engage in competition if they were told about preferential treatment, while men’s engagement was unaffected. Additionally, quota selection did not reduce the chances of selecting the best performers.

Are women more interested in leadership positions?

In a study conducted in our own lab, we examined how job advertisements for leadership positions are received by potential applicants if a gender quota is mentioned[v]. Business students were asked to indicate their perceived fit for the advertised leadership position and their inclination to apply. One group of students received a job advertisement stating that a company was looking to increase the percentage of women in leadership positions and that in order to reach this goal, female applicants would be preferred until a quota of 40% was reached. Another group of students read a job advertisement without this information. Results showed that information about a quota alone did not increase female students’ perceived fit for the position nor did it increase their intention to apply. However, when the job advertisement stated that women would be given preference if their qualifications were equal to those of male candidates, women reported a greater perceived fit for the leadership position and were more inclined to apply.

This study presented students with an artificial scenario. But what happens to women’s interest in leadership positions if we look at quotas in the real world? To address this question, researchers compared villages in India that introduced a gender quota for local government positions in 1993, increasing the percentage of women in these positions from 5% in 1992 to over 40% in 2000, to those that didn’t[vi]. The higher representation of women in governmental positions increased young girls’ motivation to obtain good grades and to later lead a community themselves. The authors of the study claim that the gender quota created role models for young girls, showing them potential opportunities and strengthening their confidence in their own future prospects.

These studies show that gender quotas might encourage women in their career choices, but only under certain circumstances.

How are “quota women” treated?

There is evidence suggesting that women are perceived as less competent when selected by a quota, in comparison to women selected on the basis of merit. In one study, participants imagined evaluating a woman who had been recommended for promotion[vii]. Participants received the relevant job description and an overview of the job requirements and were informed about the candidate’s qualifications and work experience. One group of participants was informed that the company had implemented a gender quota, while another group was told that candidates were selected based on merit. Although the female candidate had the same qualifications in both conditions, participants thought of her as less competent and effective on the job if the company’s rules for promotion featured a quota. What’s more, her chances to further climb up the career ladder was perceived to be smaller as well. This study exposes a negative side effect of gender quotas, namely that there can be a “stigma of incompetence” attached to women because gender quotas may suggest that merit played a negligible role in the selection process.

In a different study, researchers examined the evaluation of women leaders’ performance after their selection[viii]. Participants in this study were asked to work on a task in groups. One group was told that a female member would be the leader of the group because of her performance on an aptitude test, while another group was informed that the leader of the group had been assigned independent of performance and solely based on gender. Both groups were asked to work on a typical management task, sorting and prioritizing a number of memos. Female leaders who were ostensibly selected via quota were evaluated as less competent and were less often recommended for future tasks, regardless of their actual performance.

In another study[ix], researchers asked participants to report each other’s performance in a team task. These reports would determine their payment for the task. The researchers came to the following results: Women who were selected via a gender quota were more likely to have other group members misreport their performances. The team devalued the performance resulting in a reduced payment for female team members who were selected by a gender quota.

Hence, gender quotas can have negative side effects: Women selected on the basis of a quota may be evaluated less favourably by others in both selection contexts and in their subsequent performance than women selected on the basis of merit.

Do quotas affect behaviour in teams?

In the math problems study, we described previously[iv], either women were selected preferentially ( gender quota), or men and women had equal chances of winning. In a follow- up task, winners and losers from the previous round were asked to work in pairs on another task. The task was to choose a number between 1 and 7. The payment for this task depended on the numbers chosen: If both participants chose the same number, they both would receive the same payment according to their decision. However, if one chose a lower number, he or she would receive a higher payment than the other participant. The coordination problem becomes evident: To receive an optimal and equal payment, both people should choose the number 7; however, there is an incentive to choose a lower number as this would result in a higher payment for one participant. The results indicated that preferential treatment does not induce differences in the team members’ coordination behaviour or in the amount and fairness of payments. Therefore, the quality of teamwork remained unaffected.

In a study conducted in our own lab, we took this research one step further: At the beginning of the experiment, female participants were discriminated against by receiving a smaller payment than male participants for a simple computer task. By doing this, we were able to justify the subsequent introduction of a quota rule and reflect real-world conditions for the introduction of gender quotas more closely. We then looked at both cooperativeness in a group task and how fair the gender quota was perceived, as compared to merit-based selection. For the first part of the experiment, men were assigned to either a high-earning group or a low-earning group. Women, however, had no chance of being among the high earners, which means they were always getting paid less for the same task. During the second part of the experiment, low earners received the opportunity to be promoted to the high-earning group, either based on their performance so far, or based on a gender quota. The results showed that the gender-based promotion reduced cooperativeness in the newly assigned teams and was also perceived to be less fair than the merit-based promotion. A gender quota can disrupt an otherwise cooperative team.

These mixed findings suggest that the effects of a gender quota on team behaviour may depend on various details of the procedure, such as the initial discrimination against women or the perceived fairness of the procedure.

Gender quotas: Effective tool or potential harm?

In numerous countries and states, gender quotas are now a well-established means of increasing gender diversity in leadership positions. Some European countries like France, Norway, and Italy introduced a gender quota for corporate boards of publicly listed companies several years ago. Germany and California have adopted a quota only recently while other countries are still debating it (e.g., Canada). All in all, gender quotas are indeed an effective tool in the quest to overcome women’s underrepresentation in specific positions[x], but they also entail various side effects that have often been overlooked in popular discourse. Some side effects are positive: Women may be more likely to seize career opportunities when they have a higher chance of selection. However, other effects are harmful to women or, under certain circumstances, even to the effectiveness of a whole team.

Research examining possible modifications of gender quotas that could help avoid negative side effects have obtained promising results. One solution may be to make clear that gender quotas do not signify a deterioration of the evaluative criteria by emphasizing that selection decisions are not based solely on gender but also involve careful screening of merit, for example, by imposing a set of requirements such as equal qualifications before applying the quota[vii]. A similar rule has already been mentioned in a proposed EU Directive[xi]. Ultimately, there cannot be a definitive “Yes” or “No” regarding gender quotas since they are also a moral issue. We hope the research we’ve presented here helps you reach your own conclusions.

References 

[i] Eurostat (2018). Gender statistics. Retrieved from https://ec.europa.eu/eurostat/statistics-explained/index.php/Gender_stat...

[ii] European Commission (2015). She Figures 2015. Retrieved from https://ec.europa.eu/research/swafs/pdf/pub_gender_equality/she_figures_...

[iii] European Commission (2017). 2017 Report on equality between women and men in the EU. Retrieved from https://eeas.europa.eu/sites/eeas/files/ 2017_report_equality_women_men_in_the_eu_en.pdf

[iv] Balafoutas, L., & Sutter, M. (2012). Affirmative action policies promote women and do not harm efficiency in the laboratory. Science, 335, 579–582. https://doi.org/10.1126/science.1211180

[v] Nater, C., & Sczesny, S. (2016). Affirmative action policies in job advertisements for leadership positions: How they affect women’s and men’s inclination to apply. European Journal of Social Psychology, 46, 891–902. https://doi.org/10.1002/ejsp.2200

[vi] Beaman, L., Duflo, E., Pande, R., & Topalova, P. (2012). Female leadership raises aspirations and educational attainment for girls: A policy experiment in India. Science, 335, 582–586. https://doi.org/10.1126/science.1212382

[vii] Heilman, M. E., Battle, W.S., Keller, C. E., & Lee, A. R. (1998). Type of affirmative action policy: A determinant of reactions to sex-based preferential selection? Journal of Applied Psychology, 3(2), 190–205. https://doi.org/10.1037/0021-9010.83.2.190

[viii] DeMatteo, J. S., Dobbins, G. H., Myers, S. D., & Facteau, C. L. (1996). Evaluations of leadership in preferential and merit-based leader selection situations. Leadership Quarterly, 7(1), 41–62. https://doi.org/10.1016/S1048-9843(96)90034-X

[ix] Leibbrandt, A., Wang, L. C., & Foo, C. (2018). Gender quotas, competitions, and peer review: Experimental evidence on the backlash against women. Management Science, 64(8), 3501–3516. https://doi.org/10.1287/mnsc.2017.2772

[x] European Institute for Gender Equality (2019). Legislative quotas can be strong drivers for gender balance in boardrooms. Retrieved from: https://eige.europa.eu/gender-statistics/dgs/data-talks/legislative-quot...

[xi] European Commission (2012). Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures [COM/2012/0614 final - 2012/0299 (COD)] Retrieved from https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52012PC0614