Newsletter

April 2010

MBA Gender Wage-Gap

The economists Marianne Bertrand (Chicago), Claudia Goldin (Harvard), and
Lawrence Katz (Harvard) analyzed the gender wage-gap by analyzing the career
outcomes of more than 2,000 male and female MBAs from the University of Chicago.

Their conclusion: while gender discrimination may be a minor contributor to the
male-female wage differential, it is desire — or the lack thereof — that
accounts for most of the wage gap. The economists identified three main factors:

1. Women have slightly lower GPAs than men and, perhaps more important, they
   take fewer finance courses. All else being equal, there is a strong correlation
   between a finance background and career earnings.
2. Over the first fifteen years of their careers, women work fewer hours than
   men, 52 per week versus 58. Over fifteen years, that six-hour difference adds up
   to six months’ less experience.
3. Women take more career interruptions than men. After ten years in the
   workforce, only 10% of male MBAs went for six months or more without working,
   compared with 40% of female MBAs.

The big issue seems to be that many women, even those with MBAs, love kids. The
average female MBA with no children works only 3% fewer hours than the average
male MBA. But female MBAs with children work 24% less. "The pecuniary penalties
from shorter hours and any job discontinuity among MBAs are enormous," the three
economists write. "It appears that many MBA mothers, especially those with
well-off spouses, decided to slow down within a few years following their first
birth."

mjperry.blogspot.com (via Freckonomics blog), January 23, 2010