Getting ahead: the determinants of payoffs to internal promotion for young US men and women

Using the data from the National Longitudinal Survey of Youth, this paper examines the role of gender in the promotion process and the importance of promotions in the relative labour market outcomes of young men and women in their early careers. Specifically, how do the factors related to promotion differ for men and women? How do gender differences in promotion translate into differences in subsequent wage growth? To what extend does the promotions gap contribute to the gender wage gap? In answering these questions, alternative definitions of “promotion” will be considered. Getting ahead matters – particularly for women. The results indicate that women are less likely to be promoted. This gender gap in promotions – the magnitude of which depends on the measure of promotion considered – is explained by differences in the returns to characteristics. Had men and women in our sample faced the same promotion standard, promotion rates would have been higher for women than for men. Furthermore, the share of overall wage growth attributable to promotion is much larger for women than for men reflecting a bifurcation in outcomes between women who get ahead and women who get left behind. Eliminating gender differences in the determinants of and wage payoffs to promotion would contribute to a narrowing of the gender way gap.