Bloomberg: There’s a gender gap in MBA pay … and, it’s a big deal!

Biennially, Bloomberg (Business Week) ranks MBA schools based, in part, on surveys of employers, current students, and alumni.

This year, they used the alumni sample to assess career progression – how well MBAs are doing (and getting paid) a few years after their b-school graduation.

The general finding: “The data shows that 6 to 8 years after graduation, the typical alum makes $169,000 … triple their pre-MBA compensation.”

That’s pretty good, right?

But, there’s a big divide.

“Within a few years of graduation, women with MBAs earn lower salaries, manage fewer people, and are less pleased with their progress than men with the same degree.”

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What the heck is going on?

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The survey was a large sample – over 12,000 respondents, disproportionately from top b-school programs, but representing a broad array of companies and industries.

Some specific findings:

  • Women and men start their post-MBA careers earning almost the same money—$98,000 for women and $105,000 for men
  • After being out 6 to 8 years, men earned a median of $175,000 and women, $140,000 … about 80% of what men are being paid.
  • The gap is evident regardless of the job and industry — e.g. women in marketing at a bank earned $7,000 less than men;  women investment bankers earned $115,000 less than men.
  • The gap persisted regardless of the job they held—women in marketing at a bank earned $7,000 less than men. Women investment bankers earned $115,000 less than men.
  • A counter example is Deloitte: The female MBAs at Deloitte who responded to the survey earned $169,000 —$4,000 more than the 65 men at the firm.

The data is relatively clear, but the underlying factors aren’t.

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There may be some industry “mix” going on.

Could it be that women are choosing less financially rewarding fields?

It’s true that male MBA grads tend to gravitate toward professions that pay more.

Among the alums in our survey, 43%  of men work in the five most lucrative industries, such as real estate and consulting, vs. 32% of women.

But even when women went into high-paying fields, they were underpaid relative to men.

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Bloomberg observes that more of their male respondents were managers, but relatively fewer women were managing more than a handful of employees.  More than 1/4th of women MBAs said that they had no direct or indirect reports.

That begs the question, why is that?

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Research has shown that female MBAs are more likely than men to take time off to raise kids.

Bloomberg cites 2014 HBS study found that 28%  of recent female alumni took off more than six months to care for children; only 2% of men did.

“That decision didn’t affect their likelihood of eventually becoming a top manager” but experts say it often delays promotions and  stalls salary growth.

Another variant of the “mommy penalty” in business.

We’ll have more on that in a subsequent post.

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Thanks to JF for feeding the lead.

#HomaFiles

Follow on Twitter @KenHoma            >> Latest Posts

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One Response to “Bloomberg: There’s a gender gap in MBA pay … and, it’s a big deal!”

  1. John Milnes Baker Says:

    Since they don’t have to pay them as much, why don’t companies just hire women and save all that money? Oh, there are other factors at play, you say. I knew there must be a catch ……Silly me – I thought it was just a “war on women.”

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