Harvard Business School’s Claudia Goldin and Lawrence Katz showed the high price women pay if they choose careers in finance
Goldin and Katz’s survey of 6,500 Harvard and Radcliffe graduates from 1969 and 1992, found that women who had earned an M.B.A. were less likely to be employed and have children (30%) at their fifteenth class reunion than were female who earned M.D. degrees (45%).
They concluded that female M.B.A.s with children select professions with shorter hours, compared to their male peers with children and childless peers of both genders.
The financial impact of this choice is significant: Goldin and Katz found that even after correcting for the amount of time out of work, female M.B.A.s who took a year and a half off made 41 percent less than their counterparts who had worked continuously.
The pay gap was somewhat less for J.D.s (29 percent) and M.D.s (16 percent).
Goldin and Katz collaborated with University of Chicago economist Marianne Bertrand on another survey of 2,500 male and female University of Chicago M.B.A.s graduating between 1990 and 2006, considered women M.B.A.s involvement in finance roles.
They found that only 8 percent of respondents working in venture capital were women, half the rate of women in investment banking.
In contrast, 59 percent worked in advertising and 71 percent held roles in human resources.
Again, this choice has a significant financial impact for women: Nine years after graduating, the Chicago M.B.A.s working in investment banking (both male and female) were making, on average, $700,000 a year (median was $470,000), compared to an average income for all respondents of $370,000 (median was $190,000).
Occupations with the highest numbers of men also had the highest average number of hours worked, with investment banking averaging 74 hours a week, and consulting averaging 61 hours per week.
In contrast, occupations with the highest numbers of women had the shortest hours: Human resources averaged 51 hours per week and advertising averaged 52 hours a week.
These occupations tend to have lower average pay in addition to requiring fewer average hours of work.
This trend was replicated in medical specialties, in which those with shorter and more predictable hours tend to have more females.
Women now make up 41 percent of new M.D.s in the U.S., but fewer than 30 percent of physicians under the age of 35 practice emergency medicine or general surgery, but 70 percent of gynecologists and nearly 60 percent of dermatologists in the same age cohort are women.
These studies demonstrate the relationship between income, hours worked, and gender-based occupational role choice.