Old Boys' Club: Cullen & Perez-Truglia (2023)

What this is. The paper’s core results, the event-study identification design, and the empirical specifications with exact estimating equations: enough to understand what was found and how, without reading all 38 pages. To replicate or extend, read the full source at doi:10.1257/aer.20210863.

TL;DR

Cullen and Perez-Truglia exploit quasi-random manager rotations at a large anonymous commercial bank in Southeast Asia. Male employees gain promotion pay grades under male managers, and smoking employees do so under smoking managers. The evidence points to face-to-face social interactions as a mechanism: employees in these groups share more work breaks with managers of the same type. The male-to-male advantage accumulates to 0.54 pay grades after 2.5 years and is concentrated among employees who work in physical proximity to their manager. The abstract says this mechanism could explain a third of the gender gap in promotions; Section IV’s back-of-the-envelope calculation attributes 40 percent of the pay-grade gap to it, which the authors note may be an upper bound. The estimated effects do not come with significant measured differences in effort, sales performance, or retention. The paper provides causal evidence related to the old boys’ club hypothesis, extending the correlational evidence of Kunze and Miller (2017) and contributing to the gender pay gap literature of Goldin (2014) and Bertrand, Goldin, and Katz (2010).

Core results

Magnitudes and significance are as reported. Locators point into the source PDF.

#	Result	Locator	Magnitude
R1	Smoker-to-smoker promotion advantage: smoking employees promoted faster under a smoking manager	Figure 1, panel B, p. 1718; text p. 1719	Double-difference = 0.63 pay grades at 10 quarters (p = 0.035), ~15 percent salary increase
R2	Smoking employees share significantly more breaks with a smoking manager	Figure 2, panel A, p. 1721; text p. 1722	+24 pp (38% to 62% of breaks, p = 0.002); no effect for nonsmoking employees
R3	Male employees promoted faster under a male manager (double-differences)	Figure 7, panel A, p. 1729; text p. 1730	Male-to-male double-difference = 0.65 pay grades at 10 quarters (p < 0.001)
R4	Male-to-male advantage (dual-double-differences, gain and lose)	Figure 7, panel C, p. 1729; text p. 1730	0.54 pay grades at 10 quarters (p < 0.001)
R5	Male employees share significantly more breaks with a male manager	Figure 2, panel C, p. 1721; text p. 1732	+14.5 pp (46.7% to 61.2%, p = 0.017); no robust effect for female employees
R6	Male-to-male advantage concentrated in high-proximity positions	Figure 8, p. 1732	0.76 pay grades high-proximity (p < 0.001) vs 0.21 low-proximity (p = 0.178); difference p = 0.013
R7	Male-to-male advantage accounts for up to 40 percent of the gender gap	Section IV, p. 1734	0.54 x 0.66 = 0.36 pay grade reduction; gap falls from 0.90 to 0.54 pay grades; authors note 40 percent is an upper bound
R8	No significant effect on effort (days worked, hours), sales performance, or firm exit	Figure 3, p. 1723; text p. 1724	All coefficients near zero and insignificant (e.g., attrition at 10 quarters = -0.010, p = 0.887)
R9	Smoking employees’ single-difference promotion gain under a smoking manager	Figure 1, panel A, p. 1718; text p. 1719	+0.70 pay grades at 10 quarters (p = 0.002)
R10	Nonsmoking employees’ promotion response to gaining a smoking manager	Figure 1, panel A, p. 1718; text p. 1719	+0.07 pay grades at 10 quarters (p = 0.722)
R11	Birthday parity placebo for the promotion event study	text p. 1720	Odd/even birthday coefficients are close to zero, insignificant, and precisely estimated; exact coefficients are not reported in the main text
R12	Pretransition placebo in smoking employees’ shared-break outcome	Figure 2, panel A, p. 1721; text p. 1722	-2 pp (p = 0.846)
R13	Shared-break response and pretrend for nonsmoking employees	Figure 2, panel B, p. 1721; text p. 1722	Posttransition: -3 pp (p = 0.625); pretransition placebo: +1 pp (p = 0.845)
R14	Smoker-to-smoker promotion advantage by manager proximity	Figure 5, p. 1726	1.02 pay grades high proximity (p = 0.017) vs 0.34 low proximity (p = 0.410); difference p = 0.269
R15	Male employees’ single-difference promotion gain under a male manager	Figure 6, panel A, p. 1728; text p. 1727	+0.60 pay grades at 10 quarters (p < 0.001)
R16	Female employees’ promotion response to gaining a male manager	Figure 6, panel A, p. 1728; text p. 1727	-0.043 pay grades (p = 0.736); male-female coefficient difference p < 0.001
R17	Shared-trait gain falsification for pay grades	Figure 4, panel A, p. 1725; text p. 1725	+0.05 pay grades at 10 quarters (p = 0.478)
R18	Shared-trait loss falsification for pay grades	Figure 4, panel B, p. 1725; text p. 1726	+0.08 pay grades at 10 quarters (p = 0.316)
R19	Reverse-transition male-to-male promotion advantage	Figure 7, panel B, p. 1729; text p. 1730	0.44 pay grades at 10 quarters (p < 0.001); difference from gaining estimate of 0.65 has p = 0.343
R20	Pretransition placebo in male employees’ shared-break outcome	Figure 2, panel C, p. 1721; text p. 1732	+0.2 pp (p = 0.987)
R21	Shared-break response for female employees gaining a male manager	Figure 2, panel D, p. 1721; text p. 1732	-8 pp (p = 0.037); pretransition estimate -11 pp (p = 0.080), and authors report no robust posttransition evidence
R22	Timing of the dual-double-difference male-to-male advantage	text p. 1731	Quarters +1 to +8: 0.10, 0.10, 0.12, 0.16, 0.20, 0.21, 0.30, 0.38 pay grades; p-values 0.006, 0.032, 0.022, 0.012, 0.011, 0.016, 0.001, <0.001
R23	Comparison of smoker-to-smoker and male-to-male promotion estimates	text p. 1733	0.63 vs 0.65 pay grades at 10 quarters; equality test p = 0.956
R24	Comparison of smoking and gender effects on shared breaks	text p. 1733	25 pp vs 14.5 pp; equality test p = 0.360
R25	Descriptive promotion-gap comparison by maternity-leave history	text p. 1734	0.83 pay grades without recorded leave vs 1.09 with leave; difference p < 0.001 (23.9% of the latter gap; not a causal estimate)

Overall (paper’s conclusion). Manager-employee social interactions may give some employees a durable and economically large promotion advantage when they share the manager’s type (smoking status or gender). The effect builds gradually over two years as more employees cycle through promotion opportunities, is concentrated in positions requiring physical proximity to the manager, and is not accompanied by any significant measured differences in productivity outcomes. The abstract says this mechanism could explain a third of the gender gap in promotions; Section IV’s calculation attributes up to 40 percent of the observed gender gap in pay grades to the male-to-male advantage, comparable in magnitude to the motherhood penalty.

Theory / model

The paper has no formal economic model. It tests two related hypotheses about face-to-face social interactions and promotions.

Hypothesis 1 (smoker-to-smoker advantage). Employees who smoke and gain a smoking manager have more shared smoking breaks, leading the manager to favor them in promotion decisions or to learn more about their effort and potential through increased contact. This advantage should be absent for nonsmoking employees gaining a smoking manager, and larger among employees who work in physical proximity to their manager.

Hypothesis 2 (male-to-male advantage). Male employees broadly have more opportunities for social interaction with male managers than female employees do, not limited to smoking breaks. Switching from a female manager to a male manager therefore raises male employees’ promotion prospects but not female employees’. The effect should again be larger in high-proximity positions.

The identification logic rests on the quasi-random rotation of managers as part of the firm’s standard practice of rotating personnel across teams to give them broad exposure (pp. 1704-1705, pp. 1712-1713). The paper tests this assumption via parallel pre-trends and via a falsification exercise using the reverse transition direction (losing vs. gaining a male manager), which produces roughly mirror-image effects. An affinity-channel falsification using shared demographic traits (same province, same college, or close in age, covering 16, 8, and 43 percent of pairs respectively) finds a small and insignificant gain effect on pay grade at 10 quarters (0.05 pay grades, p = 0.478) compared to the smoker-to-smoker estimate of 0.63. The authors caution that affinity may explain some of the advantage, but these measured shared traits do not explain it entirely. Evidence from Bandiera, Barankay, and Rasul (2009) on manager social connections in a different workplace setting is cited for context. For magnitude context, the paper compares the male-to-male estimate to motherhood-penalty estimates in Kleven, Landais, and Søgaard (2019).

Method

The estimator is a two-way fixed-effects event-study exploiting manager rotation events, introduced in Section IIA (p. 1716). Let $y_{i,t}$ be the outcome for employee $i$ at month $t$. Let $S_i \in \{0,1\}$ indicate whether the employee smokes, and let $J_S = \{N2S, N2N, S2S, S2N\}$ denote the four types of manager transitions (N2S = nonsmoking-to-smoking manager, etc.). For event-time leads and lags $\mathcal{E} = \{-30, \ldots, -4, 0, +1, \ldots, +30\}$ (monthly, aggregated to quarterly for presentation), the baseline specification is (equation 1, p. 1717):

$$y_{i,t} = \sum_{j \in J_S} \sum_{e \in \mathcal{E}} \beta_{j,e}^S \cdot S_i \cdot D_{i,t+e}^j + \sum_{j \in J_S} \sum_{e \in \mathcal{E}} \beta_{j,e}^N \cdot (1-S_i) \cdot D_{i,t+e}^j + \gamma_i + \eta_{i,t} + \delta_t^S + \delta_t^N + \epsilon_{i,t} \tag{1}$$

where $D_{i,t+e}^j = 1$ if employee $i$ experiences a type-$j$ manager transition at time $t+e$, $\gamma_i$ are employee fixed effects, $\eta_{i,t}$ are manager fixed effects, and $\delta_t^S$, $\delta_t^N$ are separate month effects for smokers and nonsmokers. Standard errors are two-way clustered by team and manager (p. 1717). The omitted categories are the three months before the event (months -3, -2, and -1); the paper adds absorbing dummies for the extreme event-time categories at or before -31 and at or after +31 months (p. 1717).

The key estimands are:

• Single-difference for smokers: $\beta_{N2S,e}^S - \beta_{N2N,e}^S$, the gain from acquiring a smoking manager vs. acquiring any nonsmoking manager.
• Double-difference: $\left(\beta_{N2S,e}^S - \beta_{N2N,e}^S\right) - \left(\beta_{N2S,e}^N - \beta_{N2N,e}^N\right)$, the differential effect of a smoking manager on smoking vs. nonsmoking employees (R1).

The male-to-male specification is identical to equation (1) but replaces the smoking indicator $S_i$ with a female indicator $F_i$ and the transition set $J_S$ with $J_G = \{F2M, F2F, M2F, M2M\}$ (p. 1727). A symmetric dual-double-difference for the male-to-male analysis (R4) averages the double-difference from gaining a male manager (panel A of Figure 7) with the negative of the double-difference from losing a male manager (panel B of Figure 7), using a disjoint set of transition events as a sharp robustness check.

For social interactions, the outcome $\text{Share}_{i,m}$ is the fraction of work breaks employee $i$ took with manager $m$. Since this is measured as a cross-section of employee-manager pairs rather than a monthly panel, the specification collapses to (equation 2, p. 1720):

$$\text{Share}_{i,m} = \sum_{j \in J_S} \beta_{j,\text{post}}^S S_i D_{i,m}^j + \sum_{j \in J_S} \beta_{j,\text{post}}^N (1-S_i) D_{i,m}^j + \sum_{j \in J_S} \beta_{j,\text{pre}}^S S_i D_{i,m+1}^j + \sum_{j \in J_S} \beta_{j,\text{pre}}^N (1-S_i) D_{i,m+1}^j + \mathbf{X}_{i,m} \boldsymbol{\gamma} + \epsilon_{i,m} \tag{2}$$

where $D_{i,m}^j = 1$ if employee $i$ experienced a type-$j$ transition from manager $m-1$ to $m$, and $D_{i,m+1}^j = 1$ for the upcoming transition from $m$ to $m+1$ (used as a placebo pre-trend test). Controls $\mathbf{X}_{i,m}$ include unit size, manager pay grade, employee and manager smoking indicators, and position-title dummies.

Empirical specifications

Smoker-to-smoker advantage (Section II, R1-R2, R9-R14). The sample is male employees and male managers with assignable smoking status: 2,907 unique employees, 997 unique managers, 1,798 manager transition events, 94,728 employee-month observations. Outcome for R1 and R9-R11: monthly pay grade (range 41-66, January 2015 to December 2018); Figure 1 standard errors cluster by team and manager. Outcome for R2 and R12-R13: share of breaks with the manager (manager relationship survey, cross-section of employee-manager pairs); Figure 2 has 1,287 employee-manager observations for 699 workers, and standard errors cluster by manager and employee. Equation (2) also includes unit size, manager pay grade, smoking indicators for employee and manager, and position-title indicators. The headline estimate is the double-difference at 10 quarters posttransition.

Male-to-male advantage (Section III, R3-R7, R15-R24). The full panel covers 14,638 unique employees, 1,269 unique managers, 8,670 transition events, and 380,959 employee-month observations (65 percent female). Equation (1)‘s gender specification is written out from the replacement described in footnote 39 (text p. 1727):

$$y_{i,t} = \sum_{j \in J_G} \sum_{e \in \mathcal{E}} \beta_{j,e}^M \cdot (1-F_i) \cdot D_{i,t+e}^j + \sum_{j \in J_G} \sum_{e \in \mathcal{E}} \beta_{j,e}^F \cdot F_i \cdot D_{i,t+e}^j + \gamma_i + \eta_{i,t} + \delta_t^M + \delta_t^F + \epsilon_{i,t}$$

Here $F_i=1$ for female employees and $J_G=\{F2M,F2F,M2F,M2M\}$ is the set of manager-gender transitions. Employee and manager fixed effects and separate month effects by employee gender follow equation (1); standard errors cluster two-way by team and manager. Figure 6 compares gaining transitions, Figure 7’s reverse-transition check compares losing transitions, and Figure 7 panel C averages the gain estimate and the negative of the loss estimate using disjoint transition events. Figure 7 reports 380,964 observations in its note (p. 1729), while the Figure 6 note reports 380,959. Figure 2’s gender interaction sample has 4,843 observations for 2,638 workers; its standard errors cluster by manager and employee (Figure 2 note, p. 1721). The primary headline estimate (R4) uses the dual-double-differences from panel C of Figure 7.

Physical proximity heterogeneity (R6). The dual-double-differences model is re-estimated separately for high-proximity and low-proximity subsamples. High-proximity classification uses card-swipe floor-sharing data (headquarters employees, 45 percent of the sample) and survey-reported daily proximity (sales and distribution employees); roughly half of employees fall in each group. The 0.76 vs. 0.21 pay grade contrast (p = 0.013 for the difference) confirms the face-to-face interaction channel.

Effort, performance, and retention (R8, Figure 3). The same event-study specification as equation (1) is run with four alternative dependent variables: log days worked (HR absence records), log daily hours worked (card-swipe data, headquarters only), monthly sales revenue index (sales-role employees, normalized to mean 100), and a firm-exit dummy. All post-transition coefficients are close to zero and precisely estimated, with pre-trends also flat.

Affinity-channel falsification (Section IIE, Figure 4). The event-study is re-run using transitions in which an employee gains or loses a manager with a shared demographic trait. The posttransition pay grade coefficient at 10 quarters is 0.05 (p = 0.478), well below the 0.63 smoker-to-smoker estimate, ruling out pure demographic affinity as the driver.

Additional distinct checks and comparisons (R11-R13, R17-R25). Figure 1’s lead coefficients support parallel pretrends, and an odd/even birthday placebo is reported as close to zero and precisely estimated (text p. 1720). Figure 2 reports the stated pretransition placebos and the nonsmoker and female interaction outcomes. Figure 4’s shared-trait gain and loss tests are separate specifications. Figure 7’s losing-manager estimates form the disjoint reverse-transition check; its event-time path grows from 0.10 at quarter +1 to 0.38 by quarter +8 (text p. 1731). The December 2018 maternity-leave comparison is descriptive and the authors explicitly caution that it is not a causal estimate (text p. 1734).

Datasets used

Dataset	Role in paper	Wiki page
Anonymous commercial bank HR records (pay grades, manager assignments, organizational chart, HR absence records)	Primary outcome (monthly pay grade), manager assignment construction, effort and retention outcomes; 2015-2018	No page yet (proprietary-confidential)
Anonymous commercial bank annual health exam (smoking status, 2017)	Smoking status for 59% of employees (59% classified from exam, 41% from supplementary surveys)	No page yet (proprietary-confidential)
Two supplementary smoking surveys (February 2018 and December 2017)	Imputed smoking status for employees not in the health exam	No page yet (proprietary-confidential)
Manager relationship survey (share of breaks with manager, December 2017)	Social interactions measure; 3,345 of 4,847 invited employees responded (69%)	No page yet (proprietary-confidential)
Card-swipe security data (floor occupancy by employee)	Physical proximity classification for headquarters employees (45% of sample)	No page yet (proprietary-confidential)

Sample: January 2015 to December 2018 (48 months). All data originate from a single anonymous commercial bank in Southeast Asia; no external public sources used in the main analysis. The firm identity is withheld by agreement; the paper refers to it throughout as “the firm.”

When to read the full paper

Use the original if you are: tracing the mechanism in detail (the affinity-channel tests in Section IIE and proximity heterogeneity in Sections IIF and IIIE provide the richest identification evidence); applying the same manager-rotation design to a new organizational dataset (Sections IIB and IIIB lay out the parallel-trends and reverse-transitions validation); assessing how the male-to-male advantage interacts with occupational proximity or cultural norms across different settings (Section V); or running the replication code (data: doi:10.3886/E182243V1, noting the firm identity remains anonymous).

Attribution and rights

Source: peer-reviewed, American Economic Review 113(7), July 2023. This distillation was updated on 2026-10-04 and is not human-verified or independently reproduced. The article is paywalled under AEA standard terms; no CC license was found in Crossref metadata. Replication data are publicly archived at doi:10.3886/E182243V1.

Cullen, Zoë, and Ricardo Perez-Truglia. “The Old Boys’ Club: Schmoozing and the Gender Gap.” American Economic Review 113, no. 7 (July 2023): 1703-1740. DOI: 10.1257/aer.20210863. Extracted here under fair use for educational and research purposes; no verbatim reproduction of extended passages.