The Real Reason Women Aren’t Getting MBAs

The lack of women in top positions at America’s Fortune 500 companies is a problem for the country, so argue many pundits. The popularity of Sheryl Sandberg’s Lean In is testament to this. As she wrote,

We’ve ceased making progress at the top in any industry anywhere in the world … In the United States, women have had 14% of the top corporate jobs and 17% of the board seats for 10 years. Ten years of no progress.

One reason might be that women aren’t really flocking to MBA programs. Despite years of recruiting efforts by academic institutions that offer master’s degrees in business administration, MBA classes are still stuck at about one-third women. The numbers may even be going down.

But, according to a piece in the Chronicle of Higher Education, this shouldn’t be much of a surprise:

The missing link is simple, but often overlooked: the wage gap between men and women who have similar levels of experience, who work in the same fields, and who do comparable work after graduation. Everything else being equal, women earn less than men, and as a result they get a lower return on investment from an M.B.A. degree. Faced with the possibility of a smaller pay check, women take a greater financial risk than men when enrolling in business school — a daunting and even dissuading prospect.

Businesswoman

This is true even if they go to the same business schools. As the article puts it, in a survey of MBA programs “women graduating in 2014 reported an average of $14,548 less in annual pay compared with their male classmates.“

And while there is some difference because women tend to pick different industries than men, even within industries they still get paid less than men. According to an article at Bloomberg Businessweek:

17 of 22 industries that hired MBAs last year offered women less money. Women entering finance earned, on average, close to $22,000 less than men, the largest pay differential among companies that drive MBA hiring. Women were offered $12,300 less by tech companies, and $11,500 less by consulting firms than their male peers.

Women who have MBAs certainly earn more than they would have without the degrees, but it’s not like the degree is the ticket to automatic, and equal, success. Women are simply taking a bigger risk when they decide to enroll in business programs because they’re not assured of making the same salaries men can expect.

And it’s not like it’s any cheaper for a woman to get an MBA. The programs cost the same amount either way. It’s unreasonable to expect the business school numbers to get any better if the companies that hire MBA graduates don’t do something about pay differentials.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer