Women in Leadership: Exploring the Gender Pay Gap

7 Nov

Women in Leadership: Exploring the Gender Pay Gap
Blaire Byg
GALS Board

Exploring the Gender Pay Gap:
Lessons from Professor Marianne Bertrand

With stories entitled “Are Men Over?” populating the web and books being published with names like Man Down: Proof Beyond a Reasonable Doubt That Women Are Better Cops, Drivers, Gamblers, Spies, World Leaders, Beer Tasters, Hedge Fund Managers, and Just About Everything Else it is often hard to remember why feminism in the 21st century is still a relevant issue. Currently, women are earning more college degrees, graduating with higher GPAs, and experiencing a higher employment rate than men. Women are having children later in order to first obtain educations and launch successful careers and single women choosing to have children has become much less taboo.

 Yet, areas in which there are striking disparities between the two genders do still exist. One of the most prominent is in the wage levels of men and women. According to the New York Times, the largest pay gap between men and women is in the finance realm, with women earning approximately $0.70 for every dollar earned by men. The smallest gap exists in construction with women earning approximately 92.2 cents for every dollar earned by men. The median pay gap is about $0.80 earned by women for every dollar earned by men. Regardless, there is obviously still a discrepancy between the two genders.

Recently, GALS invited Professor Marianne Bertrand from the University of Chicago Booth School of Business to come to our meeting and share her research on the gender pay gap. Professor Bertrand interviewed graduates of the MBA program at the Booth School from the years 1990 through 2006. Her hope was to discover how large the pay gap actually is, what trends exist in the pay gap after graduation, and what the major causes of the pay gap are. Going into the study, Professor Bertrand claimed that she believed discrimination was probably a contributor to the pay gap. However, her findings surprised both her and the majority of attendees at last week’s GALS meeting.

Professor Marianne Bertrand
(Photo Credit: Booth School of Business) 

From 1990 to 2006 there have been 570 MBAs awarded from the Booth School, with 24% of those degrees going to women. Immediately after graduation, the pay gap between women and men with MBAs is extremely negligible. However, after ten years in the workforce the gap increases to about 60%, with female MBA-holders earning about $0.60 to every dollar earned by male MBA-holders.

Why does this occur?

Bertrand’s studies show that 10 years after graduating from an MBA program, about 40% of women have taken a six-month leave of absence from work, while only about 10% of men have taken a leave of absence of this length. Additionally, ten years after graduation women with MBA degrees work, on average, 49 hours a week, while men work about 56 hours a week. Right after graduation, however, both males and females work approximately 60 hours a week.

Another difference that Bertrand discovered in her studies was the type of courses taken while enrolled in an MBA program. Females tend to gravitate towards marketing and advertising while men tend to take more finance-based courses. Typically, finance and consulting jobs tend to have a higher salary than marketing and advertising jobs, thus lending itself to the inequity in pay received by men and women in the business world.
Bertrand summed up these findings by saying that there is really not a large pay gap between males and females. Rather, there is a large pay gap between males and females who have children. Once females make the decision to have children and are forced to take some time off for maternity leave, the pay gap increases significantly. Especially in the business world, taking any time off is extremely detrimental and it is hard to come back to the same position with the exact same pay. While class choices and labor market experience also play a role in creating the pay gap, time off is by far the biggest contributor.

If you noticed anything missing from this list of contributors, you are in the same position that Professor Bertrand was after she completed her study. The absence of any talk of discrimination is very striking. Based off of her studies, Bertrand found almost no evidence that gender discrimination plays a role in causing the gender pay gap. From her interviews with graduates of the Booth School, Bertrand found that there were very few instances of discrimination and certainly not enough to make it statistically significant. This result surprised her a great deal.

The fact that there is very little gender discrimination occurring in the business world is a positive development. Many of the reasons that the pay gap exists are present because of the choices that women are making. Thus, it is probably safe to assume that women in the business world do not often feel marginalized and are fairly content with their position and their pay.

But does this mean there is nothing that could be improved upon?

Of course not. Maybe men should be contributing more in the very early stages of child-raising and taking time off from their work, allowing the female to return to work earlier. Maybe there should be more of an effort to make women more financially literate before entering into MBA programs so that more females become interested in finance and consulting. Maybe the business sector needs to make more of an effort to reduce productivity costs, allowing women the freedom to take a few months off for maternity leave without suffering from a massive pay cut.

All of these are possible solutions, but are by no means the right ones or the only ones. And as to whether or not gender parity in the business sector should even be our final goal is another debatable issue. Professor Bertrand seemed to think that parity doesn’t need to be the final goal, as long as women are making the choices that are causing them the most happiness. These are all issues that will need to be explored more as gender issues and feminism continue to evolve in our modern world.

Blaire Byg is a member of the GALS Board and a second-year in the College. She is involved in social outreach and programming, and she usually is a ray of sunshine during the dark days of fall. 

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