Once in the Door: Gender, Tryouts, and the Initial Salaries of Managers

Abstract

Although women pursue managerial credentials at nearly the same rate as men, gender disparities in wages exist because of the shortfall in wages women sustain relative to men at the onset of their careers. This article develops a tryout approach to test for the presence of demand-side contributions to initial wage inequality while also developing and testing theory on why it may be lessened through internships. Using detailed data on graduates from an elite management program from 2009–2010, our analyses reveal that internships are associated with the gap in men’s and women’s initial salaries. For men, there is no difference in salary offers from employers where an internship occurs versus one where an internship does not occur. However, women receive higher salaries from employers where an internship first takes place. This paper was accepted by Olav Sorenson, organizations.

Workplace Gender Pay Gaps: Does Gender Matter Less the Longer Employees Stay?

“…Gender gaps in starting salaries therefore disappeared when firms were able to observe applicants' performance during the internship. Sterling and Fernandez's (2018) results mirror studies by Petersen and Saporta (2004) and Woodhams, Lupton, Perkins, and Cowling (2015), which found gender gaps at hire gradually vanished as employees accrued firm tenure. 2 Given theoretical and empirical evidence, the information-based approach predicts that gender biases decrease over time.…”

“…In support of information-based explanations, Sterling and Fernandez (2018) found women received higher starting pay in firms in which they also completed an internship, whereas men's pay was unaffected by previous internships. Gender gaps in starting salaries therefore disappeared when firms were able to observe applicants' performance during the internship.…”

“…Within firms, pay disparities first arise at the point of hire (e.g., Brett & Stroh, 1997;Dreher, Lee, & Clerkin, 2011;Fuller, 2008;Kronberg, 2013;Petersen & Saporta, 2004;Quintana-Garc ıa & Elvira, 2016). Holding constant occupation and human capital, gender disparities at hire may result from genderspecific negotiation behavior (Babcock & Laschever, 2003), social networks (Ibarra, 1992;McDonald, Lin, & Ao, 2009), reasons for switching employers (Cooke, 2003;Dwyer, 2004), lack of information (Sterling & Fernandez, 2018), or differential treatment by hiring managers (Petersen & Saporta, 2004). Beyond the point of hire, gender pay gaps may change further as employees stay with their firm.…”

Best in Class: The Returns on Application Endorsements in Higher Education

“…Along these lines, employee referral programs, in which current employees recommend individuals for a particular job, have been studied as forms of social capital through which employers can realize better hiring outcomes (Fernandez and Weinberg, 1997;Fernandez, Castilla, and Moore, 2000). Parallel to these research efforts, scholars have examined trial and short-duration work programs, which allow employers to observe individuals' job performance before making longer-term hiring commitments (Kalleberg, 2000;Houseman, 2001;Sterling and Fernandez, 2018).…”

Why Are Women Penalized in Product Markets?

“…The logic behind this prediction comes from literature that shows that decision makers rely on gender stereotypes and cultural scripts more under conditions of uncertainty. Thus, disadvantages for women are greater when less information is available (Heilman and Haynes 2005;Kalev 2009;Ridgeway 2011;Rideway and Correll 2004;Sterling and Fernandez 2018;Uhlmann and Cohen 2007). In the case of product markets, when buyers are uncertain about the market price, stereotypes and cultural scripts about gender influence perceptions of the value of the product and the transaction, thereby influencing how much buyers are willing to pay for the specific product being sold by a female or a male seller.…”