Women and MBA: Smaller Salary Gap, but Career Hurdles

MBA women face a shrinking pay gap but persistent career hurdles. A study reveals slower promotions, lower organizational levels, and DEI concerns, especially for minority women.

Women and MBA: Smaller pay gap, but career hurdles

The pay gap between women and men with a Master of Business Administration has narrowed, but inequalities in career prospects still exist. When people belong to a minority, an amplifying effect is observed. These are the results of a recent study by the Forté Foundation.

The gender pay gap for MBA students and graduates has drastically decreased between 2016 and 2020: from 39 to 20 percent. This is the conclusion of the report "Do MBA Programs Provide An Equitable Application Process, Academic Experience, and Career Outcomes?". For the study, the Forté Foundation, a non-profit association of top universities, B-schools, and companies, surveyed a total of 3,133 MBA students, prospective students, and graduates from nearly 60 elite MBA programs in autumn 2020.

Pay gap in MBA: Progress with a big "but"

Despite a smaller pay gap, differences still exist: The gender pay gap widens the further women advance in their careers. Female MBA graduates with zero to two years of professional experience earn nine percent less compared to men. For those with nine or more years of professional experience, a gap of 35 percent opens up. Between men and women who do not belong to a minority, there is an overall pay difference of 14 percent. For women who belong to a minority, the average difference is currently even 42 percent.

Promotion opportunities: Career disadvantages for women

According to the Forté study, women are promoted less frequently after an MBA than men – specifically 1.2 times compared to 1.7 times for men. They also reach, on average, one organizational level higher than women (men: director; women: senior managers). The number of employees for whom women have disciplinary responsibility is also lower. In contrast to salary, however, there is no significant difference here depending on whether women belong to a minority or not.

The study identifies different starting positions for the genders as the cause of career differences: Since men made career jumps earlier, they had already reached the position at the beginning of an MBA program that women aspire to five years later. This is reflected in career ambitions: While 22 percent of men aim for C-level positions, only twelve percent of women do.