The 940 students who started classes at Harvard Business School this week counted more women in their ranks than ever before. Women are 41 percent of the school’s 2016 MBA class, according to a preliminary class profile. That’s slightly higher than the 37 percent average across all North American business schools. The school may find it difficult, however, to reach full gender equality any time soon.
Despite sometimes-critical accounts of its attempts to fix the campus environment for women, HBS has managed to keep its share of new women MBAs above 40 percent for three years. The school is catching up to University of Pennsylvania’s Wharton School, which last year admitted 42 percent women into its MBA program, marking the fifth year its class included more than 40 percent women.
Fifteen years ago, the percentage of women entering the top U.S. business schools was considerably lower, with HBS, Wharton, and Stanford’s Graduate School of Business each launching new MBA classes that were 30 percent female. At the University of Chicago’s Booth School of Business, only one in five students were women. Back then, NYU’s Stern School of Business was the only elite program to enroll more than 40 percent women MBAs.
The share of women in business schools at least compares favorably with the woeful underrepresentation of women in executive roles, and indeed at many levels of senior management. While governments wrestle with legislation and incentives to increase their number, business schools must match that with efforts to encourage more women to pursue an MBA, and push them to have more impact and presence in the boardroom—as well as the front of the MBA classroom.
Harvard recently celebrated 50 years of women in its MBA program (eight female students stood alongside 676 men in the Class of 1965). What would it take for women to represent 50 percent of the MBA classroom there, or at other elite schools?
Targeted outreach, alumni networking, more standardized testing options, positive role models, and corporate support all play their part. And schools can expect more success in certain parts of the world than others. While women make up 43 percent of the world’s GMAT test-takers, they are in the majority in China (64 percent) and Russia (57 percent), while representing 38 percent in the U.S., about 33 percent in Western Europe and Latin America, and only 27 percent in India.
But these efforts are undermined by the continued gender wage gap that often sees women earning between 15 and 20 fewer cents to the dollar than their male counterparts coming out of business school. This is partly because of the sectors women choose after their MBA.
Solving gender inequality at later career stages may help improve the pipeline into business school. “Business schools need to help women to reach the same positions and compensation as men, irrespective of the number of female students in the MBA program,” says Bernard Garrette, associate dean of the MBA program at France’s HEC Paris. If women with MBAs achieve the same seniority and compensation as men, says Garrette, we may see them enter business programs in greater numbers.
Beyond the wage gap, the return on investment of an MBA for a woman in her late 20s or early 30s does not look the same if she wants to start a family in the prime of her childbearing years. A 2009 study of Booth MBAs by the National Bureau of Economics Research reported that the bulk of gender differences in earnings across the 10 to 15 years following MBA completion was primarily related to greater career discontinuity, less job experience, and shorter work hours for female MBAs.
And the ever-spiraling cost of two years at a top business school, with the associated loss of salary, is going to dissuade more women from taking on the significant debt burden when, according to the NBER study, the careers of MBA mothers slow down substantially within a few years following their first child.
Harvard’s own policy of offering aid only to MBAs with a financial need might hurt the business school by turning off women who earn enough that they would not qualify. Unlike many rivals, HBS does not offer scholarships, and steers admitted applicants toward external sources of funding. It may well need to review this policy if it wants to reach gender parity.
Garrette further points out that until this wage gap is removed, schools will suffer in MBA rankings that place a significant weighting on post-MBA salaries (Garrette’s MBA program this year admitted 36 percent women). If Harvard admitted a class with 50 percent women next year, some rankings would punish the program. Although the Financial Times, for example, awards points in its ranking model for the percentage of female students in a school’s full-time MBA program, these criteria contribute only 2 percent to the ranking, while salary outcomes account for a much greater share. Bloomberg Businessweek does not count salary toward its full-time MBA rankings.
Will we see one of the top business schools reporting an incoming class with 50 percent women by the end of this decade? Let’s hope so, but it is going to take creative thinking and a collective effort to remove the wage gap to get there.