The Value of Skill Signals for Women’s Careers

We show that observable skill signals are more important for women's career advancement than for men's. Signals of higher education and professional experience increase male directors' probability to enter a leadership position by 7.1%, and their compensation by 6.7% ($287,850). Female directors with these signals are 13.9% more likely to enter a leadership position, and their compensation is 20.0% ($809,400) higher. These results are in line with models of screening discrimination, in which women need to provide more observable skill signals to make up for the fact that employers find it more difficult to judge on their unobservable qualification for a job. Supporting this channel, we find that our results are stronger for firms with all-male nomination committees, for firms located in gender-conservative states, and for outside hires where information asymmetries are larger.