Women In Business

The gender wage gap – and why it still exists


Equal pay for equal work is still somewhat a taboo among many business people. And fact is, there is still quite a large wage gap between men and women in big parts of the world – also the so-called developed countries. New research has shown that the difference in wage is especially visible in women’s 20s and 30s – but why is that?

With a focus on MBA graduates you can read about the wage gap between men and women and how wage inequality changes throughout women’s age.

Equal pay among MBA’s

In 2017 Vox described how a group of researchers from University of Chicago focused on the wage of men and women after their MBA. An education that should put the graduates in somewhat the same position in the eyes of the employer.

Their research shows that a women with an MBA earned around $115,000 right after graduation, whereas men in general earned $130,000. The study also shows that the men often had more hours during the week as well as more experience prior to the MBA. These factors can influence the small wage gap found at that time.

Fast forward 9 years

Nine years later, the same people where asked anew about their salary. The women now earned $250,000 in average while men earned $400,000. A pay gap of 60 percent.

Why did it happen?

Equal work, unequal pay

According to Claudia Goldin, an economist at Harvard University, former president at American Economic Association and a senior researcher in the field of gender pay gap, wage discrimination can no longer be ignored.

She believes, that the employers are not systematically downgrading women’s worth at work, but fact is, that for every American dollar a man earns, a woman only earns 79 cents.

To understand this gender wage gap, Claudia Goldin believes we must look at where it exists!

The business sector has the biggest pay gap

Goldin took a closer look at four different sectors: Tech, Science, Business and Health. The wage gap between men and women were different in the different sectors, but why?

Within Tech and Science, the wage gap was relatively small, while the biggest pay gap was in the business sector. There is a big difference between women in Tech and in Business.

A typical business woman will have some pretty fixed working hours from 9 to 5 – and longer. Here she meets with other business people and clients. She needs to available in those hours, if she wants to do her job well in the eyes of the employer.

A typical researcher works in a lab and has a very autonomous workflow. She needs to do experiments, but she does not need to be in the lab within some fixed working hours. As long as she gets her job done, her employer will think of her as a good employee.

This is of course simplified, but it taps directly into the problem. How two women makes their work-life balance work.

Some hours are more important in some jobs, than they are in others – and within those jobs, there are a particularly large wage gap.

The wage gap changes with age

The research by Goldin shows that the wage gap between men and women is at its highest when women are in the 20s and 30s, after this, the gap shrinks. Why? Something happens in women’s 20s and 30s, that changes again when they are in their 40s and 50s.

Million of women work the classic nine-to-five, a period that worked perfectly well back when women didn’t work, but a stay-at-home-mom. Today is very different. But even as women has entered the labor market, she is often in charge of the home at the same time.

A research from 2015 by Pew Research Center, they asked who oversaw the housekeeping. The research showed that women in 54% of the cases oversaw the children’s activities. 47% of the time the children were ill, the women took care of them, and in 47% of the cases, it was a shared responsibility. The families were also asked who was responsible for the housekeeping in general. 31% of the time, women were in charge, 59% it was a shared responsibility.

Children, at the work that follows, are indeed still accursed to the women, even though she works 9-5 – like her husband.

MBA women with and without children

One thing is putting men against women, and the difference that makes. A lot of people could point out that men can’t go through labor and other arguments. But what if we put up women with an MBA, who has children versus the women with no children?

The research from University of Chicago showed that women with children had twice the wage gap to men, as women without children. Does this mean that the wage gap between women with and without children and men is unavoidable?

Not necessarily.

Flexible working hours is the way to go

According to the research made by Goldin, the way to reduce wage differences is to make the working hours more flexible.

The best way to tackle the gender wage gap is by implanting politics that makes all the hours of the day valuable – or at least take a step in that direction.

About Tine Duhrr

Tine Dührr is a digital content manager at Finduddannelse.dk, a Danish search engine for further education.

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