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The yawning pay gap between male and female business graduates is not driven by gender discrimination, but rather an outcome of the decision to have children, according to Marianne Bertrand, Fred G. Steingraber/A. T. Kearney Professor of Economics.
A study of full-time Chicago Booth MBA alumni revealed a 60 percent earnings difference between men and women 10 to 15 years after graduation. Rather than explicit or implicit discrimination or lower levels of performance or ambition among women, the pay gap was almost entirely explained by a divide between women who had children and those who did not.
“The essential reason for the difference is children,” Bertrand said at a Global Leadership Series event held at the school’s London campus March 5.
“Taking time out can be very costly as you don’t re-enter the labor force in the same position. One or two years after the birth of her first child, the woman’s earnings are $45,000 below what they would have been had the child not been born.”
Bertrand said an interesting twist was the role a woman’s spouse played. Women with high-earning husbands took much more time out of work after the birth of their first child; they also reduce their weekly working hours more than those with spouses on modest incomes. So the decision for MBA mothers to slow down is more likely to be made in households where the loss of one income is not such a big deal.”
Bertrand said her findings were “good news” because it showed discrimination was not a factor. “Looking at the data, this is not a story of women knocking on a door they can’t open,” she said. “It is more a story about a set of mothers who, given the structure of the jobs available, make a choice with their spouses that they would rather slow down than stay on that fast track.”
— Phil Thornton