"Potential" and the Gender Promotion Gap

Alan Benson, Danielle Li and Kelly Shue

American Economic Review, 2026, vol. 116, issue 2, 375-417

Abstract: We show that subjective assessments of employee "potential" contribute to gender gaps in promotion and pay. Using data on 29,809 management-track employees from a large retail chain, we find that women receive substantially lower potential ratings despite receiving higher performance ratings. Differences in potential ratings account for approximately half of the gender promotion gap. Women's lower potential ratings do not reflect accurate forecasts of future performance: Women subsequently outperform male colleagues, both on average and on the margin of promotion. We highlight two mechanisms driving the gender potential gap: strategic retention and stereotyping.

JEL-codes: J16 J31 J71 L81 M12 M51 (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1257/aer.20220831

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