Peer Effects and the Gender Gap in Corporate Leadership

This paper investigates whether exposure to a larger share of female peers during an MBA program causally affects the gender gap in senior corporate leadership positions. The research question is motivated by the persistent underrepresentation of women in top management: in S&P 1500 companies, women hold only 6% of CEO positions despite comprising 40% of the workforce.

The authors merge administrative data from a top-10 U.S. business school (graduating classes 2000–2018, excluding 2009) with public LinkedIn profile data covering full employment histories, firm-level data from multiple sources including InHerSight crowdsourced female-employee ratings, and a 2023–2024 alumni survey of female graduates. Senior management is defined as Vice President, Director, Senior Vice President, or C-level executive, identified from exact job titles in LinkedIn CVs.

Identification exploits the quasi-random assignment of incoming MBA students to one of eight sections of approximately 60 students each, based on alphabetical order with balance checks on gender, undergraduate institution, and ethnicity. This assignment generates exogenous variation in the share of female section peers (mean 34%, standard deviation 4 percentage points). Randomization tests following Guryan et al. (2009) and Caeyers and Fafchamps (2021) confirm the assignment is as good as random. The estimating equation is a linear-in-means model with class, year, and class-by-year fixed effects interacted with gender, plus individual and section-level controls.

The paper first documents a baseline gender gap: despite 96% of both male and female MBA graduates entering management within 15 years, women are 24% less likely than men to hold senior management positions. This gap emerges immediately after graduation, persists for at least 15 years, and is partly attributable to lower promotion rates from first-level management (43% of women in first-level management transition to senior management within five years, versus 57% of men).

The main causal finding is that a 4 percentage point (1 SD) increase in the share of female MBA section peers increases the probability of a woman holding a senior management position by 8.4% (a 3.3 percentage point increase off a 39.1% baseline), equivalent to a 26% reduction in the management gender gap. There is no corresponding effect for men. The effect emerges as early as two years post-graduation, peaks around year seven, and persists through the 15-year horizon.

The increase is concentrated in female-friendly firms, defined as those with above-median ratings on InHerSight metrics including maternity leave generosity, flexible work schedules, and professional support. Women with more female peers are significantly more likely to transition into female-friendly firms 6 to 10 years after graduation — a period coinciding with prime childbearing years — where they subsequently attain senior management roles. The effect on senior management in female-friendly firms is statistically distinguishable from the null effect in non-female-friendly firms (p-value = 0.03). The results are largest in male-dominated industries (consulting, tech, finance) where women face greater barriers to informal networks.

A survey of 283 female MBA alumnae (10% response rate) reveals three mechanisms: (i) information sharing, especially gender-specific advice about employer policies and culture; (ii) higher ambitions and self-confidence through role modeling and emotional support; and (iii) increased perceived support from male MBA peers as female section representation rises. Corroborating the information-sharing channel, women with more female peers are more likely to work at the same firms as their female section peers, particularly when those firms are female-friendly.

A counterfactual exercise shows that reallocating the existing stock of female students so that all sections have at least 34% women would yield 2 to 5 additional female senior managers per graduating class (a 2.4% to 8.4% increase), holding the total number of female students fixed.

Q: What is the baseline gender gap in senior management among MBA graduates, and how does it evolve over time? A: Female MBA graduates are 24% less likely than male graduates to hold senior management positions in the 15 years after graduation. The gap emerges immediately after the MBA and persists for at least 15 years without closing. At year 15, 74% of men hold a senior management position compared to 59% of women.

Q: How is female peer share defined and what is its distribution across sections? A: Female peer share is the proportion of female students in an individual’s assigned MBA section of approximately 60 students, excluding the individual themselves. The average section female share is 34% with a standard deviation of 4 percentage points. The distribution ranges from 19% at the 1st percentile to 45% at the 99th percentile, with the interquartile range spanning approximately 32% to 36%.

Q: What is the main causal estimate of female peers on women’s senior management probability? A: A 4 percentage point (1 SD) increase in female section peer share increases the probability of a woman holding a senior management position by 8.4% (3.3 percentage points off a 39.1% mean), averaged across the 15 post-MBA years. This translates to a 26% reduction in the management gender gap. There is no statistically significant effect on men.

Q: When does the effect of female peers emerge and how does it evolve dynamically? A: The effect on women emerges as early as two years after MBA graduation and grows over time, peaking around seven years post-graduation. The effect is persistent across the 15-year horizon studied. Estimates become less precise toward the end of the sample period as recent cohorts contribute fewer observations.

Q: How do female-friendly firms mediate the main result? A: The main effect is entirely concentrated in female-friendly firms (those with above-median InHerSight ratings). The coefficient on female peer share is positive and significant for senior management in female-friendly firms, and statistically indistinguishable from zero in non-female-friendly firms. The difference between the two coefficients is significant at p = 0.03.

Q: What is the mechanism linking female peers to female-friendly firm transitions? A: Women with more female peers are significantly more likely to be employed at female-friendly firms 6 to 10 years after graduation, a window corresponding to prime childbearing years. This suggests female peers facilitate sorting into supportive firm environments when family-work tradeoffs become most acute. Once at female-friendly firms, women attain senior management positions at higher rates.

Q: Does the increase in female senior managers reflect easier paths (smaller firms, lower pay, non-P&L roles)? A: No. The effect is significant for both small (under 500 employees) and large (over 5,000 employees) firms, with no significant effect on the firm size of employment itself. There is no consistent pattern of women being promoted in firms with higher or lower average compensation. The increase in female senior managers includes those with Profit and Loss responsibilities, indicating these are substantive management positions.

Q: In which industries is the effect largest, and what does this imply? A: The effect is concentrated in male-dominated industries (consulting, tech, finance), with no significant effect in female-dominated industries (consumer goods, healthcare). The difference between coefficients is significant at the 3% level. Entry rates into male-dominated industries are not significantly affected, suggesting the mechanism is higher promotion rates within these industries rather than differential sorting into them. The authors interpret this as evidence that female MBA networks are most valuable where women face greater barriers to informal workplace networks.

Q: What does the survey evidence reveal about mechanisms? A: Among 283 survey respondents (10% response rate), three mechanisms emerge: information sharing about gender-specific employer attributes and policies; raising ambitions and self-confidence through role modeling; and increased perceived support from male MBA peers as section female share rises. Women with more female peers are also more likely to work at the same firms as their female section peers, especially female-friendly ones, consistent with referral and information-sharing channels.

Q: Does the effect operate through greater attachment to the corporate pipeline (fewer career breaks, higher entry into management)? A: No. Female peers do not significantly affect employment rates, career break incidence, entry into first-level management positions, or self-employment rates. The results thus reflect higher promotion rates from first-level management into senior management, not changes in pipeline attachment.

Q: What do the randomization tests show about identification validity? A: Two randomization tests confirm as-good-as-random assignment. Following Guryan et al. (2009), the section-level leave-out mean female share is not significantly different from zero after controlling for the class-level leave-out mean. Following Caeyers and Fafchamps (2021), after netting out the asymptotic exclusion bias, the female share coefficient is insignificant across all specifications. A simulation test (Bietenbeck 2020) finds no statistically significant difference between the actual and simulated within-class female share distributions.

Q: What placebo tests are conducted and what do they show? A: Two placebo tests are run. First, 1,000 random reassignments of students to sections within the same class show the true estimated effect for women lies outside the distribution of placebo effects, while the null effect for men lies within it. Second, estimating the main equation for up to three years before MBA enrollment finds no consistent pre-treatment effect of female share on future female graduates, supporting the identification strategy.

Q: What is the counterfactual policy exercise and what does it imply? A: Holding the total number of female students fixed, reallocating them so that all sections contain at least 34% women would yield 2 to 5 additional female senior managers per graduating class (a 2.4% to 8.4% increase). This assumes nonlinearity in the relationship and suggests meaningful gains from rebalancing section composition without increasing overall female enrollment.

Q: How do the results compare to the Thomas (2021) finding that more male peers raise female MBA earnings? A: The authors note several differences: Thomas (2021) focuses on starting earnings while this paper studies senior management positions over 15 years; the two studies use different universities and time periods; and this paper employs gender-by-cohort fixed effects to account for time trends in female labor market outcomes. The authors suggest these design and outcome differences explain the divergent findings.

Section peers: Students assigned to the same MBA section of approximately 60 students who take core classes together and form the primary peer network; sections are assigned quasi-randomly based on alphabetical order with balance adjustments, generating exogenous variation in gender composition.

Female-friendly firms: Firms with above-median ratings on InHerSight, a crowdsourced platform where female employees rate employers on metrics including maternity leave generosity, flexible work schedules, mentorship programs, and female representation in management; defined in this paper’s own terms as firms whose cultures and policies help women balance work-family responsibilities and support career advancement.

Senior management: Positions defined as Vice President (VP), Director, Senior Vice President (SVP), or C-level executive, identified using keyword matching on exact job titles from LinkedIn CVs; distinguished from first-level management (managers and supervisors) and representing the upper rungs of the corporate management ladder.

Female share (treatment variable): The proportion of female students among an individual’s section peers, excluding the individual themselves (leave-out mean); averaged 34% with a 4 percentage point standard deviation across sections, after residualizing by graduating class.

Management gender gap: The 24 percentage point (24%) difference in the likelihood of female versus male MBA graduates holding senior management positions within 15 years of graduation; emerges immediately post-MBA and does not close over the observed horizon.

Information sharing mechanism: The channel through which female MBA peers provide gender-specific advice and information about employer policies, culture, and female-friendliness that is otherwise difficult to observe; evidenced by the co-location of women with more female peers at the same female-friendly firms as their section peers.

Exclusion bias: The systematic negative correlation between an individual’s own characteristic and her leave-out peer mean that arises mechanically when individuals cannot be their own peer under assignment without replacement; addressed via the Caeyers and Fafchamps (2021) correction in randomization tests.