IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/23242.html
   My bibliography  Save this paper

When Harry Fired Sally: The Double Standard in Punishing Misconduct

Author

Listed:
  • Mark L. Egan
  • Gregor Matvos
  • Amit Seru

Abstract

We examine gender discrimination in misconduct punishment in the financial advisory industry. 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 outcomes despite engaging in misconduct that is 20% less costly and having a substantially lower propensity towards repeat offenses. For females, a disproportionate share of misconduct complaints are initiated by the firm rather than by customers or regulators. Moreover, firms with a greater percentage of female executives at the firm or at the local branch discriminate less in both separation and hiring. There is no evidence that the observed gender differences proxy for other adviser characteristics, such as productivity or behavior such as career interruptions. We extend our analysis to explore discrimination against ethnic minorities among male advisers and find similar patterns of “in-group” tolerance. Our evidence is inconsistent with statistical discrimination and suggests that managers are more forgiving of missteps among members of their own gender/ethnic group. We explore whether this bias arises from miscalibrated beliefs about misconduct or from taste-based discrimination. The observed discrimination appears to be context-dependent since it diminishes with adviser's tenure within the firm, suggesting that miscalibrated beliefs due to stereotyping may play a critical role in the observed discrimination.

Suggested Citation

  • Mark L. Egan & Gregor Matvos & Amit Seru, 2017. "When Harry Fired Sally: The Double Standard in Punishing Misconduct," NBER Working Papers 23242, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23242
    Note: CF LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w23242.pdf
    Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. David Neumark & Roy J. Bank & Kyle D. Van Nort, 1996. "Sex Discrimination in Restaurant Hiring: An Audit Study," The Quarterly Journal of Economics, Oxford University Press, vol. 111(3), pages 915-941.
    2. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
    3. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2008. "Using Selection on Observed Variables to Assess Bias from Unobservables When Evaluating Swan-Ganz Catheterization," American Economic Review, American Economic Association, vol. 98(2), pages 345-350, May.
    4. Vojtěch Bartoš & Michal Bauer & Julie Chytilová & Filip Matějka, 2016. "Attention Discrimination: Theory and Field Experiments with Monitoring Information Acquisition," American Economic Review, American Economic Association, vol. 106(6), pages 1437-1475, June.
    5. Tomasz Piskorski & Amit Seru & James Witkin, 2015. "Asset Quality Misrepresentation by Financial Intermediaries: Evidence from the RMBS Market," Journal of Finance, American Finance Association, vol. 70(6), pages 2635-2678, December.
    6. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 1067-1101.
    7. Joseph G. Altonji & Charles R. Pierret, 2001. "Employer Learning and Statistical Discrimination," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 313-350.
    8. Marianne Bertrand & Claudia Goldin & Lawrence F. Katz, 2010. "Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 228-255, July.
    9. Justin Wolfers, 2006. "Diagnosing Discrimination: Stock Returns and CEO Gender," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 531-541, 04-05.
    10. Kerwin Kofi Charles & Jonathan Guryan, 2008. "Prejudice and Wages: An Empirical Assessment of Becker's The Economics of Discrimination," Journal of Political Economy, University of Chicago Press, vol. 116(5), pages 773-809, October.
    11. Tracy Yue Wang & Andrew Winton & Xiaoyun Yu, 2010. "Corporate Fraud and Business Conditions: Evidence from IPOs," Journal of Finance, American Finance Association, vol. 65(6), pages 2255-2292, December.
    12. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:23242. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: () or (Joanne Lustig). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.