Financial Adviser Misconduct and Labor Market Penalties: Uncovering Racial Disparities in the Absence of Gender Gaps
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arXiv
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| Format: | Preprint |
| Published: |
2025
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| _version_ | 1866929761859665920 |
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| author | Honda, Jun |
| author_facet | Honda, Jun |
| contents | Using a comprehensive matched employer-employee dataset for U.S. financial advisers from 2008 to 2018, we revisit established evidence on labor market penalties following financial misconduct. Prior studies report that female advisers are 20% more likely to exit their firms following misconduct and that similar disparities exist for non-white advisers. However, by disaggregating misconduct into distinct disclosure events - differentiating those that nearly always trigger job terminations from those that do not - we show that the apparent gender gap vanishes, while significant racial disparities persist. Specifically, non-white advisers face approximately 24% higher job separation rates than their white counterparts. Robustness checks confirm these findings across alternative specifications, suggesting that race-based differential treatment in the labor market is a distinct phenomenon warranting further investigation. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2503_12837 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Financial Adviser Misconduct and Labor Market Penalties: Uncovering Racial Disparities in the Absence of Gender Gaps Honda, Jun General Economics Economics Using a comprehensive matched employer-employee dataset for U.S. financial advisers from 2008 to 2018, we revisit established evidence on labor market penalties following financial misconduct. Prior studies report that female advisers are 20% more likely to exit their firms following misconduct and that similar disparities exist for non-white advisers. However, by disaggregating misconduct into distinct disclosure events - differentiating those that nearly always trigger job terminations from those that do not - we show that the apparent gender gap vanishes, while significant racial disparities persist. Specifically, non-white advisers face approximately 24% higher job separation rates than their white counterparts. Robustness checks confirm these findings across alternative specifications, suggesting that race-based differential treatment in the labor market is a distinct phenomenon warranting further investigation. |
| title | Financial Adviser Misconduct and Labor Market Penalties: Uncovering Racial Disparities in the Absence of Gender Gaps |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2503.12837 |