Credentials Matter, but Only for Men: Evidence from the S&P 500

Abstract

We study gender differences in the value of credentials in managerial labor markets. We use within-firm variation in S&P 500 status for marginal firms “just included” on the index and managers who joined a marginal firm before its addition to the index to obtain variation in S&P 500 experience. We then difference out any unobservables that affect both women and men within the same firm-year. Men with experience at an S&P 500 firm obtain more subsequent independent directorships and executive roles at other S&P 500 firms, but not at non-S&P 500 firms. The increase is 12-42% relative to the average. Strikingly, we observe no such relationship for women. Our results suggest that one obstacle women face in the managerial labor market is that they receive less credit than men for similar credentials.

Keywords: Women in management, gender diversity, board of directors, executives, credentials

JEL Classification: G3, J16, J7, K2, M12, M51