The MBA Gender Pay Gap? $14K In Year One

Women MBAs are at a salary disadvantage from the onset of their post-business school careers, new data shows. According to self-reported data from MBAs graduating from top U.S. business schools, women earn an average total compensation package of $14,000 less than men in their first year of work. The data has been compiled by Transparent Career, an online MBA job reporting platform founded by an MBA team from the University of Chicago Booth School of Business.

On average, men make $180,000 in total compensation in their first jobs after graduating with an MBA. Women, on average, make $166,000. More than 2,300 recently graduated MBAs were included in the dataset. The data backs up what many previous reports have already found: employers pay men more than they pay women. But perhaps most disturbing about this new dataset is the timing. It’s not happening five or 10 years into a career, but right after graduation.

“For this analysis, we looked specifically at the full-time jobs MBAs got right out of school,” Transparent Career CEO and co-founder Mitch Kirby wrote in a blog post that analyzed the data. “This helps to eliminate a lot of the issues normally found in studies like this, because the individuals in our dataset have essentially identical credentials and have access to the exact same set of jobs.”

The disparities manifest in both average salaries and various bonuses, with the majority stemming from the average annual salary and average bonus. For example, male MBAs report average salaries of $121,500 right out of business school, while women report an average of $117,400. The gap grows even more in annual bonuses where men report earning an average of $24,900 and women report $16,900. “That’s pretty huge coming right out of graduate school,” Kirby wrote of the overall total compensation gap.

In an attempt to get to the bottom of the gap, Kirby broke the data down into job functions. The data reveals some intriguing trends. At one end, women actually made $44,335 more than men on average in sales job functions. On the other end, men going into investment management functions made an incredible $96,964 more than women. Those were the extreme outliers, however, and most job functions saw total compensation differences closer to the overall $14,000 gap.

  • More facts

    Agreed – why should you need to control for firm/industry? Does that not point to an inherent bias, or do people honestly believe that women biologically just make different career choices?
    Not everyone who takes issue with the gender pay gap is inept at statistics.

  • Factual?

    I’m not sure why discussing industry averages are not valid “facts”? If industry average is factual enough when we’re discussing which school lands you better jobs, why isn’t it meaningful when discussing which gender gets paid more?

    Yes, different companies/ roles pay more than others but a difference in averages should inherently control for that unless your sampling of people is somehow skewed. (I.e. You surveyed all the women at unknown consulting firm and compared them against men at McKinsey). If you’re saying the difference is because women are, on average, at less pay-competitive firms, then there’s still a point there. Why are there not more women in firms that pay better? I find it hard to believe there is a systematic issue of self-selection or “opting out”. Do those firms need to adjust hiring practices? Or are companies across the board, on average, paying women less?

    I’m not sure when using aggregate data became meaningless or less “factual”. Yes, discussing specific companies might be useful in its own way, but discussing averages is a still great starting point for this discussion.

  • Give Me Facts

    This is the most disappointing article on the P&Q. Dissapointing not because of the wage gap, but because of this propaganda.

    I was hoping that you would provide evidence of wage gap in a SPECIFIC FIRM not just within the industry. Some firms pay more others pay less, Transparent MBA could be using their time to found multi-billion dollar companies instead of writing pointless articles without being able to back up their claims.

    Happy to hear if there are any real facts that would change my mind. So far, all the facts presented have not been properly analyses and the conclusions reached are very biased and inappropriate.