Benefits and Compensation

Why Is There Still a Gender Pay Gap?

Does the gender gap happen in the job market? Two researchers, Wharton Professors Matthew Bidwell and Roxana Barbulescu at McGill University in Montreal, focused on applicants’ choices during their job searches. Their research subjects were 1,255 men and women entering the job market after graduating from a large, elite, 1-year international MBA program.

A rarified atmosphere, you say? Perhaps, but Bidwell and Barbulescu focused on the industries and kinds of jobs that generate the highest salaries, looking for the ways in which men and women either sorted themselves out or were sorted out by recruiters. Note that the gender pay gap in the highest-paying jobs exerts a disproportionate influence on the average pay gap all the way down the line.

Two industries Bidwell and Barbulescu set their sights on were such Wall Street-type finance jobs as investment banking and consulting—both sources of very high salaries.

The researchers surveyed students about their job interests before the MBA program and then afterward, to find out what kinds of jobs they applied for, where they got offers, and what jobs they ultimately accepted., now thoroughly revamped with easier navigation and more complete compensation information, will tell you what’s being paid right in your state—or even metropolitan area—for hundreds of jobs. Try it at no cost and get a complimentary special report. Read more.

Equally Likely … When They Apply

They found that women were significantly less likely to apply for investment banking spots and somewhat less likely to choose consulting jobs than men were. Interestingly, when women did apply for investment banking jobs, they were just as likely to get them as the men who applied.

Take a closer look at motivations. Bidwell and Barbulescu delved deeper, breaking down influences on job search decisions into three different factors:

  • applicants’ preferences for specific rewards from their jobs, such as money or flexibility;
  • applicants’ ability to identify with particular kinds of jobs, which tends to be tied to how applicants see themselves; and
  • applicants’ expectations of whether an application could succeed.

One important aspect of the search is what the researchers refer to as “expected work/life satisfaction,” a factor they tested against 19 different job types. That turned out to be decisive in their findings: Women were significantly less likely than men to apply for jobs in which work/life satisfaction was seen as low.

Said Bidwell, “This explained why women weren’t applying for consulting jobs. The hours are not that much worse than investment banking jobs, but the expectation is that you will be staying in a hotel 4 nights a week.”

Apparently, men are more willing to trade that drawback for big bucks than are women—or at least that’s what the researchers speculate.

They noted that business practices that reduce conflicts between work and family demands could even this out. However, “workplaces with fewer women face less pressure to adapt their working styles to accommodate family demands,” so gender segregation becomes self-perpetuating.

Further, the researchers found, women identified the least with stereotypically masculine jobs, such as investment banking, a reputedly macho culture. From before their MBA program began to after they’d ended, Bidwell and Barbulescu found that women and men showed similar levels of confidence about job offers in most fields—except investment banking.

Bidwell and Barbulescu found that women are more likely to apply for jobs in what they describe as “general management,” including positions in internal finance and marketing. And, on average, people in investment banking and hedge funds for at least 10 or 15 years were making two to three times as much as those in general management.

So, are the differences between men and women genetic? Or do they lie in the differences between how boys and girls are socialized—by their parents, schools, and society at large? Even if they’re a mixture, will they change? How fast?

We clearly don’t know the answers yet. Bidwell and Barbulescu’s study, “Do Women Choose Different Jobs from Men? Mechanisms of Application Segregation in the Market for Managerial Workers,” will appear in the journal Organization Science.

What’s the gender pay gap at your organization like? Anyone a victim of gender pay discrimination? Use the comment link or email me at