Why Do Women Struggle to Climb the Corporate Ladder? Evidence from Retail Frontline Managers
34 Pages Posted: 17 Feb 2021
Date Written: December 30, 2020
Today women are still struggling to climb the corporate ladder. While existing gender studies have focused on individual workers or C-suite executives, why men climb the corporate ladder faster than women remains a mystery. To fill this void in the literature, we explore gender differences and disparities in low-level management by empirically investigating the performance of frontline managers in a large sportswear retail chain. We observe a substantial performance gap between male and female managers—stores with male mangers generate 34.4% higher sales than stores with female managers. Meanwhile, we find male managers are more likely assigned to stores with high sales potential than female managers. After matching stores based on sales-potential characteristics, the performance gap becomes quantitatively and statistically insignificant. These results suggest that the seemingly large gender gap in managerial performance reflects the fact that store assignment is inequitable across genders. This interpretation is supported by a triple differences (DDD) estimation—we find no evidence that manager gender changes associated with manager changes affect store sales. We rule out an alternative hypothesis that differential manager ability across genders contributes to the gender gap. We conduct a maximum likelihood estimation of a discrete-time Markov chain that models the processes of store assignment and manager turnover, and we rule out the possibility that inequitable store assignment can be explained by a gender preference hypothesis. We develop a resource inequity index to measure gender inequity in store assignment and link it to the gender pay gap based on manager compensation data.
Keywords: gender inequity, resource allocation, frontline management, retail operations, people-centric operations
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