Unequal on top: Gender profiling and the income gap among high earner male and female professionals

• We study the income gap between high earner men and women.
• We use longitudinal data on the early careers of MBA alumni that control for variance at the level of individuals, jobs, employing organizations, and the external context.
• We find evidence that even after controlling for human and social capital, job properties, industry and economic conditions, women consistently earn lower wages than men.
• We find that the two mechanisms that drive the cumulative disadvantage for women stem from differential rewards to internal and external mobility.

We develop a comprehensive, multi-level model of income inequality between high earner men and women during the early career stages. We argue that young women are routinely subjected to “gender profiling” by employers—women’s potential contribution to the organization is interpreted through the lens of social stereotypes and cultural norms that attribute to them weaker labor market commitment than men. We investigate two specific mechanisms that arise from this profiling and lead to income inequality: First, women have diminished access to resources and advancement opportunities within the firm which results in lower returns to tenure for women than for men. Second, external mobility is greatly beneficial for men but much less so for women because it reinforces the image of weak commitment. Salary regressions of early career history data of young MBA alumni of a prestigious U.S. business school accord with our conjectures.