The Wage Gap: Why Men Earn More

Posted by: Louis Lavelle on February 15, 2012

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Which college majors have the biggest wage gap between men and women? According to a New York Times analysis of data from PayScale, the leading fields are: architecture, education, and criminal justice—with men earning 5 percent more than women. Business is a close second: Business and marketing/management have a 4 percent wage gap, while finance and accounting have a 3 percent gap.

The Times took a stab at explaining the gaps by trying to determine if the gender composition of the majors had an impact on the pay gap—it doesn’t.

But something else might. Each major can lead to any number of careers, and the pay levels for careers can vary wildly. So if men and women studying business pursue different career paths, it will affect their pay and ultimately the wage gap for that major.

To find out if this was the case, we analyzed data from our 2011 survey of U.S. business schools—the same survey we used for our most recent ranking of undergraduate business programs. (PayScale collected its data from online pay comparison tools.) Our sample included more than 20,000 graduating seniors from 139 schools who disclosed both their gender and their future career plans.

What did the data tell us? For starters, the numbers show that male business graduates are more likely than female business graduates to pursue careers in finance and consulting, while women were more likely to pursue careers in HR and marketing. The largest number of respondents, 5,623, indicated they planned to pursue careers in finance, where men outnumbered women 70 percent to 30 percent. The next largest group, marketing, accounted for 4,048 graduates, and women outnumbered men 66 percent to 34 percent. Accounting, the third largest group, was almost evenly split.

According to the National Association of Colleges and Employers, salaries for all business majors now average $48,144, but pay varies widely based on major (accounting, business administration, etc.) and industry. For example, a business administration graduate working in the retail industry, where most end up, can expect an annual salary of about $35,190, while one who goes to work for a hospital will earn $60,040.

So is the Times data surprising? Not really. If more men are using their business degrees to pursue careers in finance and consulting, more will end up working in some of the highest-paying industries. And if more women are pursuing careers in HR and marketing, more will find themselves working in lower-paying industries.

The pay gap then, isn't entirely a function of discrimination against women, although I'm sure there's probably some of that too. It's largely a function of the choices men and women make. There may be perfectly good tactical reasons for those choices--the need to repay student loans or the desire to start a family, for example. But they have consequences, and one of them may be a bigger (or smaller) paycheck.

Photography by Getty Images

Reader Comments

Rich

February 15, 2012 5:16 PM

But WHY are finance and consulting the highest-paying industries, and why are HR and marketing the lower-paying industries?

JR Dobbs

February 15, 2012 6:18 PM

Rich, it's because HR and marketing are "easy" jobs while finance and consulting are "hard" jobs. In the end it's about supply and demand. More people around to do HR work means employers can pay less.

CommonSense

February 15, 2012 7:08 PM

Because consulting = generating revenue for firms so the wage is necessarily higher to attract talented consultants.
Finance = Economic Understanding and Technical skills that directly affect the bottom line.

The typical value of these workers is greater than the typical value of the HR who sells nothing and produces nothing, and marketing, whose benefit is very subjective in comparison to Finance and Consulting.

The question you need to ask yourself is if you are a revenue producing employee, and if not, are you easily able to show how you affect the profitability of a firm? If you can't you will not be compensated at the same rate as someone who can.

joseph b

February 15, 2012 8:34 PM

Finance and consulting make more money because they generate more revenue for their employer. If more women studied software engineering they would probably be paid similar to may except for the fact that women tend to be the primary carers for their children which does have an impact on their career progression.

john

February 15, 2012 10:17 PM

Because finance and consulting require smart, motivated people to do hard work, while HR and marketing are easy, low-value women's work.

John

February 15, 2012 10:31 PM

And why do you think that is, Rich? It's hardly surprising.

B Fast

February 15, 2012 11:32 PM

Rich, "But WHY..." Could it be that finance and consulting are higher risk?

Dave

February 16, 2012 12:55 AM

@Rich- The market decides which industries pay more- supply, demand, and utility. A 10-point IQ difference might not have a big impact on the quality of employees an HR person hires, but it will make a large monetary difference if one is managing a multi-billion dollar portfolio. Consulting positions are among the most competitive and demanding, and make the real long-term strategic decisions for many firms, so of course compensation is higher.

A salary of 50k though is not bad, and is plenty to live on for most people, especially if one is married and there is a second income. Studies show that above 70-80k, a higher salary does little to improve one's happiness or quality of life. Women tend to have better intuition, and are probably less likely to enter a higher-stress field when the financial payout won't actually improve their life, whereas as men we tend to pursue a the paycheck without thinking as much.

John

February 16, 2012 3:06 PM

Ironically, a book with the same title as the article--Why Men Earn More-- and subtitled The Startling Truth Behind the Pay Gap--and What Women Can Do About It, by Dr. Warren Farrell, documents 25 differences in male-female work-life decisions that lead, aggregately, to men earning more money but to women having better (more balanced) lives (www.warrenfarrell.net for more). It basically documents how the road to high pay is a toll road. Tolls like working more weekends and after hours, more overnight and weekend traveling, doing hazardous jobs, relocating overseas or to wherever the need with little consideration for your or your family's needs, inflexible hours, etc. These tolls aren't measured adequately by the normal studies of the pay gap.

Andrea

February 16, 2012 3:08 PM

I want to second Rich's question, why are fields where there are generally more women lower paying?

Jill Bernaciak

February 20, 2012 8:34 AM

I've never heard of a major in consulting. Aren't you really talking about the choice of job AFTER graduation? Marketing and management majors can pursue consulting jobs, especially if they had an internship (and accomplished something during it), or went to a top school, or can show other academic, work or extracurricular accomplishments and leadership. Networking starts in college.

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