We examine gender differences in career progression and promotions using personnel data from the European Central Bank (ECB) during the period 2003–2017. A gender wage gap emerges within a few years of hiring, despite broadly similar entry conditions. We also find a gender promotion gap before 2010 when the ECB issued a public commitment to diversity. Following this change, the promotion gap disappears. Using data on promotion applications, we find a gender application bias, partly driven by preferences for competition. Following promotion, women perform better in terms of salary progression.

We show that firm size is increasing with the quality of the legal system in Mexico. A 1-standard-deviation improvement in the quality of the legal system is associated with a 0.15–0.30 standard deviation increase in firm size. We also show that the legal system affects firm size by reducing the idiosyncratic risk faced by firm owners. The legal system has a smaller impact on partnerships and corporations than on proprietorships, where risk is concentrated in a single owner. All of the findings are robust to instrumenting for legal quality using historical conditions. By focusing on firms in a single country, the data draw attention to the importance of informal institutions.