When Harry Fired Sally: The Double Standard in Punishing Misconduct

Mark L. Egan, Gregor Matvos and Amit Seru

No 23242, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine gender differences in misconduct punishment in the financial advisory industry. We find evidence of a “gender punishment gap”: following an incident 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 outcomes despite engaging in misconduct that is 20% less costly and having a substantially lower propensity towards repeat offenses. The gender punishment gap in hiring and firing dissipates at firms with a greater percentage of female managers at the firm or local branch level. The gender punishment gap is not driven by gender differences in occupation (type of job, firm, market, or financial products handled), productivity, misconduct, or recidivism. We extend our analysis to explore the differential treatment of ethnic minority men and find similar patterns of “in-group” tolerance. Our evidence is inconsistent with a simple Bayesian model with profit maximizing firms and suggests instead that managers are more forgiving of missteps among members of their own gender/ethnic group.

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
Note: CF LS
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Citations: View citations in EconPapers (43)

Published as Mark Egan & Gregor Matvos & Amit Seru, 2022. "When Harry Fired Sally: The Double Standard in Punishing Misconduct," Journal of Political Economy, vol 130(5), pages 1184-1248.

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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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