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The old boy network: are the professional networks of female executives less effective than men's for advancing their careers?

Published online by Cambridge University Press:  15 February 2022

Marie Lalanne  and
Paul Seabright Open the ORCID record for Paul Seabright [Opens in a new window]
Marie Lalanne*
Affiliation:
University of Turin & Collegio Carlo Alberto; Piazza Arbarello 8, 10122 Turin, Italy
Paul Seabright
Affiliation:
Toulouse School of Economics & Institute for Advanced Study in Toulouse; 1 esplanade de l'Université, 31080 Cedex 06, Toulouse, France
*
*Corresponding author. Email: marie.lalanne@carloalberto.org
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Abstract

We investigate the impact of professional networks on men's and women's earnings, using a dataset of European and North American executives. The size of an individual's network of influential former colleagues has a large positive association with remuneration, with an elasticity of around 21%. However, controlling for unobserved heterogeneity using various fixed effects as well as a placebo technique, we find that the real causal impact of networks is barely positive for men and significantly lower for women. We provide suggestive evidence indicating that the apparent discrimination against women is due to two factors: first, both men and women are helped more by own-gender than other-gender connections, and men have more of these than women do. Second, a subset of employers we identify as ‘female friendly firms’ recruit more women but reward networks less than other firms.

Keywords

Executive compensationgender wage gapplacebo techniqueprofessional networksJ16J31J33M12
Type
Research Article
Information
Journal of Institutional Economics , Volume 18 , Issue 5 , October 2022 , pp. 725 - 744
Copyright
Copyright © The Author(s), 2022. Published by Cambridge University Press on behalf of Millennium Economics Ltd.

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