Signaling Diversity Debt: Startup Gender Composition and the Gender Gap in Joiners’ Interest

Abstract

Women are underrepresented in startups, but research on “joiners” – non-founder employees attracted to startup work – offers limited explanations for why such underrepresentation occurs and how it persists. We argue that, even among joiners, women are less interested than men in applying to startup jobs and that this gender gap is associated with differential reactions to information about the gender composition of prospective employers. We analyze unique field data obtained from a job-matching mobile-application platform for startups, finding the hypothesized gender gap and showing that women, but not men, are sensitive to information about organizational gender composition, especially for startups signaling diversity debt – i.e., no or only a token representation of women. A preregistered experiment further reveals that women’s identity threat concerns mediate these effects. Gender disparities in startups are reproduced in a vicious cycle as existing underrepresentation deters women from applying. Our findings have implications for research and practice concerning joiners, the underrepresentation of women in entrepreneurship, and startups’ ability to shape the gender composition of their applicant pools.