The Gender Promotion Gap: Evidence from Central Banking

Aug 26, 2022

Abstract: We examine gender differences in career progression and promotions using personnel data from the European Central Bank (ECB) during the period 2003–2017. A gender wage gap emerges within a few years of hiring, despite broadly similar entry conditions. We also find a gender promotion gap before 2010 when the ECB issued a public commitment to diversity. Following this change, the promotion gap disappears. Using data on promotion applications, we find a gender application bias, partly driven by preferences for competition. Following promotion, women perform better in terms of salary progression.

Date: 2022-07-13

URL: https://doi.org/10.1162/rest_a_00988

Pages: 1-16

Publication: The Review of Economics and Statistics

Date Added: 10/28/2021, 10:01:41 AM

Reading Notes:

Objective: To estimate the gender differences in career progression at the European Central Bank from 2003 to 2017 using anonymized personnel data

Importance: This is one of the rare cases where the authors have data on personnel records of a large organization so they can look at bias and career progression in promotion decisions. They also have promotion applications, so they can see who applies and what the results are after they application.

Background: The sample here is composed of economists at the European Central Bank. At the beginning of their sample, the European Central Bank was young. It was founded in 1998 and the sample starts in 2003. The economists working at the ECB often start there as new PhDs, and the analysis follows their careers forward.

The promotion structure is very similar to that of the GS scale. They have several salary bands F/G (economist/senior economist), which seems to correspond to GS 12/13. They are the bands new PhDs are hired at. Salary band H (principal economist) is then the equivalent to GS 14, and salary band I (advisor) is equivalent to GS 15.

Data & Key Variables: The data is personnel records from the European Central Bank they have work histories for the full sample from 2003 to 2017. They supplement this with another dataset from 2012 to 2017 with the promotion campaigns

Key variables are the salary bands, gender, whether or not people have children, other control variables

Methodology: They run a basic Mincer regression with a variable for male versus female and look at the effect of gender on earnings (or earnings band)

Results: They find that men and women start at the same salary but then a gender gap develops and grows as they progress through their careers, especially prior to 2010. In 2010 the European Central Bank issued a public statement supporting diversity and implemented several diversity campaigns. After that the gender gap in earnings over the career in the ECB seems to have gone away for childless men and women, but still exists between men and women with children.

Women are less likely to apply for promotion but more likely to get a promotion given that they apply. Once promoted, female candidates seem to do better than male candidates do. There seems to be selection of higher-quality female candidates into the candidate pool for promotion.

Key Table/Figure:

Dani’s Reading Notes

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