Sometimes it’s not what you know but who you know, at least for men on Wall Street. For women, it’s, you know, ability and results. From the paper “Gender and Connections Among Wall Street Analysts” (via the American Economic Association annual meeting):
We study how the interplay between gender and connections affect career outcomes and performance among Wall Street analysts. We measure connections using alumni ties between analysts and the firms they cover. Male and female analysts are equally connected on average. Connection is associated with more accurate earnings forecasts for men, but not for women. Controlling for accuracy, connection is important in explaining men’s, but not women’s, probability of being voted by institutional investors as “star” analysts, an important measure of career success. For women, education achievements and accurate forecasts are important factors that determine voting outcomes. This asymmetry in the effect of connections between the two genders does not exist in an alternative, computerized process of evaluating analysts, and is most pronounced among young analysts. Our results suggest that men reap higher returns from connections than women, and that investors are more willing to rely on soft information such as connections to evaluate men than women.
Prima facie, these findings suggest a male advantage in the space on the basis of sexism. While this is certainly the case to some extent, my experience on Wall Street suggests that a more important factor is the impact of affirmative action policies on attitudes towards female wall street professionals. Affirmative action is practiced aggressively on Wall Street at the investment banks in particular in favor of females and minorities (well, unless you’re asian or indian). The effect of this is that the fact of having been hired and other soft information is widely and highly discounted (perhaps excessively so). Hence subsequent demonstrations of genuine ablity are weighted more highly.