The role of job assignment and human capital endowments in explaining gender differences in job performance and promotion

Abstract

We test a job ladders theory of career progression within internal labor markets as developed by Lazear and Rosen (1990). The theory argues that gender promotion gaps are due to sorting of men and women into career tracks with different promotion opportunities based on ex ante quit probabilities. Analyzing US federal government employees using a dynamic unobserved panel data model, we find that job assignment is one of the strongest predictors of gender differences in promotion. We also find that women have to jump higher performance hurdles to promote across grades, but, within grades, their promotion probabilities are comparable to those of men. In this organization, women can be found in both fast- and slow-track jobs, based on their promotion history, suggesting that unobserved heterogeneity is revealed to the firm over the worker's career.