Stay Hungry, Stay Foolish

Women, MBAs, gender wage-gap and children.

In Uncategorized on July 10, 2011 at 3:19 am

“There is a considerable economic price to pay for being a woman. For American women 25 and older who hold at least a bachelor’s degree and work full-time, the national median income is about $47.000. Similar men, meanwhile, make more than $66.000, a premium of 40%. The same is true even for women who attend the nation’s elite universities. The economists Claudia Goldin and Lawrence Katz found that women who went to Harvard earned less than half as much as the average Harvard man. They earned about 30% less than their male counterparts. ” p.21

“This is especially true in the high-flying financial and corporate sectors –where, moreover, women are vastly underrepresented: women hold less than 1.5% of all CEO positions. Among the top fifteen hundred companies in the US , only about 2.5% of the highest paying executive positions are held by women. This is especially surprising given that women have earned more than 30% of all the master’s in business administration’s (MBA) degrees at the nation’s top colleges over the past 25 years. Their share today is at its highest yet, 43%. After having identified three main factors for this wage-gap between male and female, the economists concluded that:

The big issues seems to be that many women, even those with MBA’s love kids.

The average female MBA with no children works only 3% fewer hours that the average male MBA. But female MBAs with children work 24% less. The authors write that it appears that many MBA mothers, especially those with well-off spouses, decides to slow down within a few years following their first birth.” This is a strange twist. Many of the best and brightest women in the United States get an MBA so they can earn high wages, but they end up marrying the best and brightest men, who also earn high wages- which affords these women the luxury of not having to work so much.

Does this mean the women’s investment of time and money in pursuing an MBA was poorly spent? Maybe not. Perhaps they never would have met such husbands if they hadn’t gone to business school. Rather than interpreting women’s lower wages as a failure, perhaps it should be seen as a sigh that a higher wage simply isn’t as meaningful an incentive for women as it is for men. Could it be that men have a weakness for money just as women have a weakness for children? “ p 44-46

Extract from Super Freakonomics. Steven D. Levitt & Stephen J. Dubner, 2009

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