Bad Business: Women MBAs Making $400,000 Less Than Men

In soccer and in business, the gender pay gap adds up to big bucks.

It’s not just women soccer players who are getting the short end of the stick.

Women MBAs earn an average of $400,000 less than their male counterparts over the 20 year time span following graduation, says Kristen Bellstrom of Fortune magazine, drawing on a new study from the Graduate Management Admission Council (GMAC).

The gender wage gap starts out small at graduation and increases as women move up the ranks.

“It’s at its widest in executive-level roles, when women earned an average $165,000 to men’s $205,000, or 80 cents to the men’s dollar,” reports Bellstrom.

That’s evidence, say the study’s sponsors, of the “barriers and obstacles that make it harder for women to advance in business careers and accrue the same financial rewards as men.”

It’s unclear what’s behind the salary differences. One likely culprit? Women MBAs are more likely than men to take time off to raise kids, which causes their careers – and salaries – to lose momentum.

(See our article on how to keep up financially, even if you’re a stay-at-home parent.)

So while both men and women say earning the MBA was worthwhile and gave them a salary boost, the financial benefits remain greater for men.

Concludes Natalie Kitroeff at Bloomberg BusinessWeek:

“An MBA may be the professional degree with the quickest return on investment in the U.S. The payoff just appears to be greater if you’re a man.”

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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