Underrepresentation of Women CEOs

Abstract

Why do so few women become CEOs? To understand this glass ceiling, we estimate a dynamic model of the CEO gender decision, which contains perceived gender productivity differences, search costs reflecting limited female labor supply, and employer disutility from discrimination. The key factor is the shortage of suitable female candidates, as boards prefer hiring women, and productivity differences between genders are minimal. We find no evidence of a glass cliff in which women become CEOs just as firms are failing. While better governance is associated with women becoming CEOs, the importance of limited female labor supply is unrelated to governance.