MBA Gender Wage-Gap

April 2010

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."