The relationship between gender and promotion over the business cycle: does firm size matter?

Abstract

This article offers a more nuanced analysis of employee promotion decisions; specifically, how they are affected by firm size, gender and stages within the business cycle. Drawing upon data from Portugal, we find that during times of adverse macroeconomic conditions, promotion prospects in all firms decline. Within large firms, women are more likely to be promoted during economic downturns, reflecting the ‘glass cliff’ hypothesis. In small and medium sized enterprises (SMEs), overall promotion rates are less affected by adverse economic conditions, however, women are less likely to attain promotions. Our results emphasise the importance of market volatility and firm heterogeneity upon promotion and importantly, reveal differing forms of gender discrimination. In large firms, women are in effect, afforded greater responsibility for the effects of market volatility whilst SMEs invest more confidence in male employees to manage during crises.