Working paper number:
Organizational mechanisms, and their contexts, leading to gender inequality among stockbrokers in two large brokerages are analyzed. Inequality is the result of gender differences in sales, as both firms use performance-based pay, paying entirely by commissions. This paper develops and tests whether performance-support bias, whereby women receive inferior sales support and sales assignments, causes the commissions gap. Newly available data on the brokerages’ internal transfers of accounts among brokers allows measurement of performance-support bias. Gender differences in the quality and quantity of transferred accounts provide a way to measure gender differences in the assignment of sales opportunities and support. Sales generated from internally transferred accounts, controlling for the accounts’ sales histories, provide a “natural experiment” testing for gender differences in sales capacities. The evidence for performance-support bias is: (1) women are assigned inferior accounts; and (2) women produce sales equivalent to men when given accounts with equivalent prior sales histories.
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