Under 2nd Review, Management Science
Women pursue managerial credentials at nearly the same rate as men but evidence suggests they receive lower salaries from the onset of their managerial careers. While demand-side contributions to this gender wage gap are argued to occur, they can be difficult to pinpoint. This article develops a novel approach to test for the presence of demand-side contributions to initial gender wage inequality while also developing and testing theoretical arguments on an organizational practice through which it is lessened: tryouts. Using detailed data on several hundred professionally-trained managers that graduate from an elite program from 2009-2010, our analyses reveal that tryouts in the form of internships narrow the gap between men’s and women’s initial salaries. For men there is no difference in salary offers from employers where an internship occurs versus one where an internship does not occur. However, women receive higher initial salaries from employers where an internship first takes place. These findings suggest that labor market advantages and disadvantages across groups respond differently to organizational practices and sheds light on the nature of practices that lessen inequality.