A recent article in The Atlantic cited research by Chicago Booth professor Marianne Bertrand to explain the earnings gap between male and female executives. The research paper, which Bertrand wrote with Harvard economists Claudia Goldin and Lawrence Katz, found that career interruptions and shorter work hours among Booth MBA women alumnae with children can explain a big part of the paycheck gap a decade after graduation, even if both MBA men and women started out with roughly the same pay.
As The Atlantic mentioned, MBA mothers endure a huge penalty relative to MBA men and women without children for trying to find a suitable work-family balance. But here’s something else worth noting: the same study also found that MBA mothers endure a huge penalty relative to other professional women. The researchers found some evidence that MBA women have more difficulty combining career and family than women in other high-powered occupations.
Comparing Harvard undergraduates who went on to receive MBA, MD, JD, or PhD degrees, the authors found that in the 15 years after the women received their advanced degrees, less than half of the MBA women who were working either full-time or part-time also had children. By contrast, 65 percent of women with MDs and 55 percent of women with PhDs and JDs were mothers.
Female physicians took the shortest non-employment spells after having a child, followed by professors and then lawyers. MBAs took the greatest amount of time off for family reasons. The earnings penalty for women who returned to work after taking more than a year off was largest for MBAs and lowest for MDs, with JDs and PhDs in between.
Moreover, compared with female physicians, MBA women were punished more for taking even brief career breaks. They found it harder to catch up after those interruptions and to achieve the level of earnings they would have had.
Bertrand, Goldin, and Katz suggested a number of possible explanations for their findings. Some of the cost differences can be explained by the inherent differences in the work, which make breaks and flexible hours more costly in the corporate world than in medicine or academia. Moreover, the “tournament nature” of the corporate ladder and the “up-or-out” culture at major law firms can impose large penalties on women who choose to interrupt their careers for families.
The authors also found that women with MBAs often have richer husbands than women with PhDs or MDs. That could make it easier for those MBA women to drop out of the labor force temporarily or permanently—they can afford to slow down and spend more time with their children.