Could It Simply Be Motherhood? : A Contrarian Rationale For Gender Pay Equity

A recently published study (discussed here in a recent NY Times article) explored the reason why pay disparity between men and women MBAs still exists.  The study sought to statistically prove or disprove the widely held belief that male prejudice continues to be the primary cause of pay gender differences. The research paper, titled "Dynamics of the Gender Gap for Young Professionals in the Corporate and Financial Sectors," was conducted by Marianne Bertrand, an economics professor at the University of Chicago, and two Harvard economics professors, Claudia Goldin and Lawrence F. Katz.

The research project studied highly-educated workers in U.S. corporate and financial sectors who graduated with their MBAs between 1990 and 2006 from top-rated U.S. business schools. The joint paper followed the careers of these MBA graduates as they progressed in the corporate and financial sectors to show how their career paths differed by gender in terms of earnings and employment several years following graduation.

The study found three primary reasons for the "large and rising gender gap in earnings" between the study's men and women MBAs:

• Differences in training prior to MBA graduation
• Differences in career interruptions
• Differences in weekly hours worked

These three determinants can explain the majority of gender differences in earnings in the years following MBA graduation.  Motherhood was directly correlated to fewer hours worked; women who became mothers worked less (52 hours per week) in contrast to their male counterparts (58 hours per week).  Becoming a mother was found to be the main contributor to a lesser job experience, greater career discontinuity and shorter work hours for female MBAs.

"Despite the narrowing of the gender gap in business education, there is a growing sense that women are not getting ahead fast enough in the corporate world," the report says.  Despite 40% of MBAs now being awarded to women, only 2.5% of senior executives in large and medium sized companies are women.  The number of women CEOs increased eight times between 1992 and 2004, but only numbered 34, or 1.3 percent of all CEOs.

The survey showed that in early careers and business schools, male and female career paths are very similar.  Men focus on finance and women on marketing as majors in business school but have similar grade point averages, similar jobs and performance ratings following graduation. Childless women had careers that progressed in line with their male counterparts; MBA mom's careers did not progress at the same level.

Dr. Bertrand said that maternity leave begins the deterioration of the working mother's career.  "Any departure, for six months or more, is costly.  Male or female, you never re-enter where you were." The study found that after a decade had passed since earning their MBA, the gap in hours between MBA mothers and the other MBAs equaled about six months' time.  

A MBA mother's earnings begins to decline within two years following the birth of the first child with the rate accelerating thereafter.  "A women's annual earnings drop by about $45,000 in the two years following the first birth, and the impact grows close to $80,000 a year in subsequent years."  Yet MBA dads' pay rates are not affected.  "Male labor supply is virtually unaffected by fatherhood," the study reported.

Recognizing the challenge of partnering parenthood with a high-powered corporate career, the study found that many MBA moms quit their jobs for self-employed consulting and then cut back on working even more over the next decade.  62% of the women in the survey sample had made that decision.  "They wanted to be excellent professionally, but they want to be excellent mothers too," Dr. Bertrand said.

Note: written by a self-employed consultant, finance and corporate world HR executive refugee, M.A., and mother of two (who was a full-time mother for eight years before returning to corporate America)!

Becky Regan is the founder and President of Regan HR, Inc., a human resources consulting firm specializing in compensation consulting for California employers and purveyor of online HR products. A former Corporate Human Resources Director (10,000+ employees) with more than 25 years of HR work experience in many industries, her team works with private, public and non-profit clients.  Becky is passionate about designing HR programs and compensation plans that build organizations.

Comments

[Vita Taylor]

Great thoughts, Becky.

This is an area of personal interest.

I have just begun reviewing a report that the Government Accounting Office issued in March 2009, which tracked the pay of federal employees from the time period of 1988 to 2008.

On April 28, The Joint Economic Committee held a hearing on the study. The resulting document, "Equal Pay for Equal Work? New Evidence on the Persistence of the Gender Pay Gap," revealed that much of the difference in pay from men to women can be explained by 3 variables: occupation, education, and experience. Still, a haunting 7 cent gap shows up persistently from decade to decade, as an unexplained variance. The variables they did account for included: leave patterns (unpaid leave and breaks in service), occupation, agency, region, education level, bargaining unit status, part-time work status, veteran status, age, race, ethnicity, and disability.

You may notice, as I did, that one of the variables they did account for was leave patterns including unpaid leave and breaks in service. Interestingly, in this study, differences in usage of unpaid leave and breaks in service accounted for less than 1 cent of the total pay gap.

The study did provide a disclaimer that differences in this cohort of participants may be different from another cohort.

As I mentioned, I am just beginning to look at this study and the statistical methodology (which was multivariate regression analysis).

In case anyone else would like to take a look at this study, I have provided the link below. On the site is the PDF report and the hearings of the Joint Economic Committee.

http://jec.senate.gov/index.cfm?FuseAction=Press.PressReleases&ContentRecord_id=cf433c8d-5056-8059-76c9-af59a1aa3b35&Region_id=&Issue_id=

[Ann Bares]

Becky:

An interesting study - thanks for sharing it with readers here. As a mother myself, I can't deny that parenthood can take a bite out of one's career and earning capacity and it's also true that women continue to bear the lion's share of that responsibility in most (but certainly not all) cases. On the other hand, studies like that done by the AAUW a few years ago show a disparate impact in pay just a year or two out of college, even within the same major discipline. This would lead me to believe that motherhood may be part of the reason, but that other factors remain at play.

Vita:

Interesting GAO report - thanks for telling us about it and sharing the link here. I'm going to take a look at it, too!

[Becky Regan]

Vita,

Thxs for the referral to the GAO; I will check it out too. I'll post another blog on this subject with some additional thoughts in the near future.

Vita & Ann,

Both of your comments lead me to ponder the possibilities of so many variables that affect pay disparity including:
- a woman's inherent capabilities coupled with less actual work experience contrasted with a male with a sold work history, yet both perform the same job well (i.e., individual differences)
- what employer, in this day & age could possibly believe that paying women less than men for performing the same job is OK?! (Unless you're located in the back hills of W. Virgina or some other extremely remote place where you're somehow insulated from the outside world).
More to come... thanks for your comments and continuing the discussion!

Becky

[Doug Sayed]

I must say this is one the best, if not the best discussions I've seen on this topic.

Professionally, as a statistically oriented person, I'm sick of seeing stats like "the average woman makes X% less than the average man" as absolute proof of gender discrimination, without controlling for factors such as education, time in the workforce, career choices, etc.

Great job Becky!