TY  - JOUR
AU  - Scotchmer,Suzanne
TI  - Risk Taking and Gender in Hierarchies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14464
PY  - 2008
Y2  - November 2008
UR  - http://www.nber.org/papers/w14464
L1  - http://www.nber.org/papers/w14464.pdf
N1  - Author contact info:
Suzanne Scotchmer
Department of Economics
Evans Hall
University of California
Berkeley, CA  94720-3880
Tel: 510/643-8562
Fax: 510/643-9657
E-Mail: scotch@berkeley.edu
AB  - In a labor market hierarchy, promotions are affected by the noisiness of information about the candidates. I study the hypothesis that males are more risk taking than females, and its implications for rates of promotion and abilities of survivors. I define promotion hierarchies with and without memory, where memory means that promotion depends on the entire history of success. In both types of hierarchies, the surviving risk takers will have lower average ability whenever they have a higher survival rate. Further, even if more risk takers than non risk takers are promoted in the beginning of the hierarchy, that will be reversed over time. The risk takers will eventually have a lower survival rate, but higher ability. As a consequence of these differences, the various requirements of employment law cannot simultaneously be satisfied. Further, if promotion standards are chosen to maximize profit, the standards will reflect gender in ways that are difficult to distinguish from discriminatory intent.
ER  -