The Opportunity Structure for Discrimination∗

Gender disparities in wages and attainment caused by employer discrimination can come about by three very different processes: (1) allocative discrimination, in terms of who gets allocated to which jobs, at the point of hire, in subsequent promotion, and dismissal, (2) within-job wage discrimination, the unequal pay for the same work for the same employer, and (3) valuative discrimination, the lower pay in occupations held primarily by women. For the U.S. it has been established that within-job wage discrimination no longer is a major source of wage differences, while valuative discrimination potentially is. Less known is the role of allocative discrimination, especially in the hiring process, which we identify as the point where discrimination is most feasible. Our analysis uses personnel data on all entrants into a large U.S. service organization in the period 1978–1986, focusing on managerial, administrative, and professional employees. We study the placement at initial hire, and then follow job levels, wages, promotions, as well as departures in years subsequent to hire. We find the largest sex differential in attainment in the placement at initial hire. As the employees remain in the organization, these initial differences in salaries and job levels erode. Theorizing and studies of gender inequality in organizations should hence increase its focus on the hiring process, where most of the action is likely to take place, yet the most neglected process.