Gender and Connections among Wall Street Analysts

We examine how alumni ties with corporate boards differentially affect male and female analysts' job performance and career outcomes. Connection improves men's job performance— forecasting accuracy and recommendation impact—significantly more than women's. Controlling for performance, connection further contributes to men's, but not women's, likelihood of being voted by institutional investors as " star " analysts, a marker of career success. These asymmetric effects are stronger in more opaque firms and among younger analysts, but is absent from a placebo test. Our evidence indicates that men reap higher benefits from social networks than women in both job performance and subjective evaluation. Alok Kumar for generously sharing their data on analyst education and gender information. We thank conference and seminar participants at the American Economic Association, INSEAD, and University of Lugano for helpful comments. All errors and omissions are our own. Huang gratefully acknowledges funding from the School of " I love my job [as an analyst]. The market does not care whether I am a man or a woman, only whether I am right or wrong. "-Kate Reddy, Sarah Jessica Parker's character in the comedy " I don't know how she does it ". Introduction Gender equality ignites impassioned debates. In the past few decades, women have advanced significantly in the labor market and education. Not only are they now the majority of the American workforce, 1 they also outnumber men among college graduates (Goldin, Katz, and Kuziemko, 2006) and account for half the class in medical and law schools. Despite these broad changes, however, the perplexing pattern remains that women are thinly represented at the top of the business world: Despite the push by many companies to enhance gender diversity especially at the top, the ranks of women among senior corporate officers and company boards remain in the single digits and low teens. 2 It thus appears that women's empowerment in education and labor market has not resulted in the breaking of the proverbial " glass ceiling " in business. This paper explores the idea that the persistent gender gap at the top of the business world could at least partially be attributed to the differential way in which men and women benefit from—and are even evaluated according to —their connections in the business community. The context of our study is Wall Street analysts; we study the interplay between gender, connections, job performance and career outcomes in this population. Wall …