Women on Wall Street profit less from their connections than men
The women of Wall Street profit less from their connections and get fewer promotions, a new study conducted by Insead researchers revealed. This could explain the fact that even thou women in the US outnumber men among college graduates, their numbers in the top business jobs remain low.
Associate Professor of Finance Lily Fang set out to examine how alumni ties with corporate boards affect male and female analysts’ job performance and career outcomes. Looking at the data, she found that just like men, 25% of women share a school tie with a senior officer or board member but this relationship works differently for men than it does for women.
And it’s not just that women analysts reap fewer rewards from their relationships, men are also more likely to receive good ratings in their industry, based on networking.
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Connections also count when analysts make mistakes. In the cases where men made errors, their networking helped them get a good professional rating, but when women made mistakes, their connections actually hurt their ratings.
And all this starts early on in the career of an analysts as for youngsters the differences were greater. And this could explain the gender gap.
“We also show that the very different impact of connections on job performance was particularly pronounced among young analysts. This vastly different ability to capitalize on connections at such an early point in their career paths could explain gender gaps that exist throughout long-term career trajectories. The cycle, it seems, starts at the entry level,” said Fang, according to Eureka Alerts.
Data practically confirms that there is such a thing as the “old boys club”, especially as it also showed that male analysts benefit more from same-sex connections, with performance improvements nearly twice as large. On the other hand, women have fewer same-sex connections and they also profit less from them.
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