Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • May 2022
  • Article
  • Journal of Political Economy

When Harry Fired Sally: The Double Standard in Punishing Misconduct

By: Mark Egan, Gregor Matvos and Amit Seru
  • Format:Print
ShareBar

Abstract

We examine gender differences in misconduct punishment in the financial advisory industry. We find evidence of a “gender punishment gap”: following an incident 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. The gender punishment gap in hiring and firing dissipates at firms with a greater percentage of female managers at the firm or local branch level. The gender punishment gap is not driven by gender differences in occupation (type of job, firm, market, or financial products handled), productivity, misconduct, or recidivism. We extend our analysis to explore the differential treatment of ethnic minority men and find similar patterns of “in-group” tolerance. Our evidence is inconsistent with a simple Bayesian model with profit maximizing firms and suggests instead that managers are more forgiving of missteps among members of their own gender/ethnic group.

Keywords

Financial Advisers; Brokers; Gender Discrimination; Consumer Finance; Financial Misconduct And Fraud; FINRA; Financial Institutions; Employees; Crime and Corruption; Gender; Prejudice and Bias; Personal Finance; Financial Services Industry

Citation

Egan, Mark, Gregor Matvos, and Amit Seru. "When Harry Fired Sally: The Double Standard in Punishing Misconduct." Journal of Political Economy 130, no. 5 (May 2022): 1184–1248.
  • Find it at Harvard
  • Read Now

About The Author

Mark L. Egan

Finance
→More Publications

More from the Authors

    • December 2022
    • Review of Financial Studies

    Conflicting Interests and the Effect of Fiduciary Duty: Evidence from Variable Annuities

    By: Mark Egan, Shan Ge and Johnny Tang
    • 2022
    • Faculty Research

    How Do Investors Value ESG?

    By: Malcolm Baker, Mark Egan and Suproteem K. Sarkar
    • Review of Economic Studies

    Recovering Investor Expectations from Demand for Index Funds

    By: Mark Egan, Alexander J. MacKay and Hanbin Yang
More from the Authors
  • Conflicting Interests and the Effect of Fiduciary Duty: Evidence from Variable Annuities By: Mark Egan, Shan Ge and Johnny Tang
  • How Do Investors Value ESG? By: Malcolm Baker, Mark Egan and Suproteem K. Sarkar
  • Recovering Investor Expectations from Demand for Index Funds By: Mark Egan, Alexander J. MacKay and Hanbin Yang
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College