NBER Working Paper No. 23242
Issued in March 2017, Revised in January 2018

NBER Program(s):Corporate Finance, Labor Studies

We examine gender discrimination in misconduct punishment in the financial advisory industry. Following an incidence of misconduct, female advisers are 20% more likely to lose their jobs and 30% less likely to find new jobs relative to male advisers.

Females face harsher outcomes despite engaging in misconduct that is 20% less costly and having a substantially lower propensity towards repeat offenses. For females, a disproportionate share of misconduct complaints are initiated by the firm rather than by customers or regulators.

Moreover, firms with a greater percentage of female executives at the firm or at the local branch discriminate less in both separation and hiring. There is no evidence that the observed gender differences proxy for other adviser characteristics, such as productivity or behavior such as career interruptions.

We extend our analysis to explore discrimination against ethnic minorities among male advisers and find similar patterns of “in-group” tolerance. Our evidence is inconsistent with statistical discrimination and suggests that managers are more forgiving of missteps among members of their own gender/ethnic group.

We explore whether this bias arises from miscalibrated beliefs about misconduct or from taste-based discrimination. The observed discrimination appears to be context-dependent since it diminishes with adviser's tenure within the firm, suggesting that miscalibrated beliefs due to stereotyping may play a critical role in the observed discrimination.

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In group tolerance aka BIAS ... do you think it is something we need to overcome? Something that is more at the root of how divisive any area of our life is, from politics to the economy to education?

What things can be done to try to unlearn these types of biases?

Well, y'all could bow to your new robot overlords that hold exacting standards for all or you could just realize that human beings make mistakes and are influenced by others.

Working in a shop environment all my adult life I have seen behavior that would make a trucker blush from women.
I have also seen in-group morals create courteous and respectful mechanics.
Plus, each shop, each shift has their own developed dynamic.

In customer based shops, there is a higher degree of tact and respect because the money depends on happy customers that come back.
In a fleet shop, it is the inter-dynamics of the management team that drives the group morality. It depends on if there is a pride and professional atmosphere or a I don't give a damn atmosphere. People pick up on that stuff.

I don't think it's something "we" can actually overcome.


Without divisiveness there is no diversity.


Transparency in the results of competing biases.
These women are harshly punished and can't find jobs that are already established in that industry?
Great. Start a new industry. Start competition within an industry.
Gather up all the disenfranchised women, start their own company.
Generate a culture in that company, in that industry.
If it's successful, that culture spreads over time.
Even if it's not successful or globally applicable, start repeating crap statistics that prove your point, even if it's from unrelated fields.

How many times in college and in work have you had to participate in "team" projects, been told to be part of a "team," be a "team player," had "team meetings," read "join our family/exciting team?"

Workers in the U.S. became scared of Japanese production techniques.
Tons of movies were made in at least the 70's and 80's about Japan taking over, about the cultural differences, about Japan dominating the world in manufacturing, cars, electronics, etc.

People used to all work for relatively big companies.
To get ahead, stick in your time, compete, prove you were better than the guy next to you, get a promotion. Simple formula.
Lead to middle to upper manager level bloat.
In order to justify their jobs and compete with the "dinosaurs" they started to implement new policies based on the crap that was popular at the time.
e.g. Japanese team building in manufacturing.
Didn't matter if it was a job not in manufacturing, didn't matter if it your job wasn't related to anyone else's, time to participate in team/group building exercises.

Now that dominates a lot of corporate culture.


There is no getting rid of bias, or "in group bias."
Only changing the bias to one that leads to what is generally seen as a "positive" outcome. Which is highly dependent upon the viewpoint of the relevant culture.