When Harry Fired Sally: The Double Standard in Punishing Misconduct

Mark L. Egan, Gregor Matvos and Amit Seru
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Mark L. Egan: University of MN
Gregor Matvos: University of Chicago

Research Papers from Stanford University, Graduate School of Business

Abstract: We examine gender discrimination in the financial advisory industry. We study a less salient mechanism for discrimination, firm discipline following missteps. There are substantial differences in the punishment of misconduct across genders. Although both female and male advisers are disciplined for misconduct, female advisers are punished more severely. Following an incidence of misconduct, female advisers are 20% more likely to lose their jobs and 30% less likely to find new jobs relative to male advisers. Females face harsher punishment despite engaging in less costly misconduct and despite a lower propensity towards repeat offenses. Relative to women, men are three times as likely to engage in misconduct, are twice as likely to be repeat offenders, and engage in misconduct that is 20% costlier. Evidence suggests that the observed behavior is not driven by productivity differences across advisers. Rather, we find supporting evidence for taste-based discrimination. For females, a disproportionate share of misconduct complaints is initiated by the firm, instead of customers or regulators. Moreover, there is significant heterogeneity among firms. Firms with a greater percentage of male executives/owners at a given branch tend to punish female advisers more severely following misconduct and also tend to hire fewer female advisers with past record of misconduct.

JEL-codes: D18 G24 G28 J71 (search for similar items in EconPapers)
Date: 2017-03
New Economics Papers: this item is included in nep-bec, nep-gen and nep-lma
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Citations: View citations in EconPapers (45)

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Related works:
Journal Article: When Harry Fired Sally: The Double Standard in Punishing Misconduct (2022)
Working Paper: When Harry Fired Sally: The Double Standard in Punishing Misconduct (2017)
Working Paper: When Harry Fired Sally: The Double Standard in Punishing Misconduct (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:3510

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