The Old Boys' Club : Schmoozing and the Gender Gap

The old boys' club refers to the alleged advantage that male employees have over their female counterparts in interacting with powerful men. For example, male employees may schmooze with their managers in ways that female employees cannot. We study this phenomenon using data from a large financial institution. We use an event study analysis of manager rotation to estimate the causal effect of managers' gender on their employees' career progression. We find that when male employees are assigned to male managers, they are promoted faster in the following years than they would have been if they were assigned to female managers. Female employees, on the contrary, have the same career progression regardless of the manager's gender. These differences in career progression cannot be explained by differences in effort or output. This male-to-male advantage can explain a third of the gender gap in promotions. Moreover, we provide suggestive evidence that these manager effects are due to socialization between male employees and male managers. We show that these manager effects are present only if the employee works in close proximity to the manager. We use survey data to show that, after transitioning to a male manager, male employees spend more time with their managers. Finally, we study a shock to socialization within males, based on the anecdotal evidence that employees who smoke tend to spend more time together. We find that when male employees who smoke switch to male managers who smoke, they spend more of their breaks with their managers and are promoted faster in the following years. Moreover, the effects of these smoking manager switches are similar in timing and magnitude to the effects of the gender manager switches