Paper: The Importance of Signaling for Women's Careers

Abstract: 
We show that signals of leadership qualification are more important for women's career advancement than for men´s. Specifically, signals of higher education, professional experience and access to professional networks increase male directors' probability to enter a leadership position by 5.2% and their compensation by 5.7% ($246,900). Female directors with these signals are 11% more likely to enter a leadership position and their compensation is 19.7% ($796,800) higher. This result is in line with models of screening discrimination, in which women need to provide more observable skill signals to counterbalance higher uncertainty about their unobservable qualifications for a leadership position. Supporting this channel, we find that our results are stronger if information asymmetries between (mostly) male employers and female candidates are larger: successions after the sudden death of a CEO, successions in firms with all-male nomination committees, and outside hires.