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Dynamics of the Gender Gap for Young Professionals in the Corporate and Financial Sectors

Author

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  • Marianne Bertrand
  • Claudia Goldin
  • Lawrence F. Katz

Abstract

This paper assesses the relative importance of various explanations for the gender gap in career outcomes for highly-educated workers in the U.S. corporate and financial sectors. The careers of MBAs, who graduated between 1990 and 2006 from a top U.S. business school, are studied to understand how career dynamics differ by gender. Although male and female MBAs have nearly identical (labor) incomes at the outset of their careers, their earnings soon diverge, with the male annual earnings advantage reaching almost 60 log points at ten to 16 years after MBA completion. We identify three proximate reasons for the large and rising gender gap in earnings: differences in training prior to MBA graduation; differences in career interruptions; and differences in weekly hours. These three determinants can explain the bulk of gender differences in earnings across the years following MBA completion. The presence of children is the main contributor to the lesser job experience, greater career discontinuity and shorter work hours for female MBAs. Some MBA mothers, especially those with well-off spouses, slow down in the labor market within a few years following their first birth. Disparities in the productive characteristics of male and female MBAs are small, but the pecuniary penalties from shorter hours and any job discontinuity are enormous for MBAs.

Suggested Citation

  • Marianne Bertrand & Claudia Goldin & Lawrence F. Katz, 2009. "Dynamics of the Gender Gap for Young Professionals in the Corporate and Financial Sectors," NBER Working Papers 14681, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:14681
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    References listed on IDEAS

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    Cited by:

    1. Clément Carbonnier, 2014. "The influence of taxes on employment of married women, evidence from the French joint income tax system," Sciences Po publications 23, Sciences Po.
    2. Del Bono, Emilia & Vuri, Daniela, 2011. "Job mobility and the gender wage gap in Italy," Labour Economics, Elsevier, vol. 18(1), pages 130-142, January.
    3. Klaus Grünberger & Christine Zulehner, 2009. "Gender-specific Wage Gaps in Austria," WIFO Monatsberichte (monthly reports), WIFO, vol. 82(2), pages 139-150, February.
    4. repec:wsi:medjxx:v:04:y:2012:i:02:n:s1793812012500083 is not listed on IDEAS
    5. James Crotty, 2009. "The Bonus-Driven “Rainmaker” Financial Firm: How These Firms Enrich Top Employees, Destroy Shareholder Value and Create Systemic Financial Instability," UMASS Amherst Economics Working Papers 2009-13, University of Massachusetts Amherst, Department of Economics.
    6. David H. Autor & Michael J. Handel, 2013. "Putting Tasks to the Test: Human Capital, Job Tasks, and Wages," Journal of Labor Economics, University of Chicago Press, vol. 31(S1), pages 59-96.
    7. Gravelle, Hugh & Hole, Arne Risa & Santos, Rita, 2011. "Measuring and testing for gender discrimination in physician pay: English family doctors," Journal of Health Economics, Elsevier, vol. 30(4), pages 660-674, July.
    8. Paul A. Grout & In-Uck Park & Silvia Sonderegger, 2009. "An Economic Theory of Glass Ceiling," The Centre for Market and Public Organisation 09/227, Department of Economics, University of Bristol, UK.
    9. Peter Kuhn & Kailing Shen, 2009. "Employers' Preferences for Gender, Age, Height and Beauty: Direct Evidence," NBER Working Papers 15564, National Bureau of Economic Research, Inc.
    10. James Crotty, 2010. "The Bonus-Driven “Rainmaker” Financial Firm: How These Firms Enrich Top Employees, Destroy Shareholder Value and Create Systemic Financial Instability (revised)," Working Papers wp209_revised3, Political Economy Research Institute, University of Massachusetts at Amherst.
    11. Tate, Geoffrey & Yang, Liu, 2015. "Female leadership and gender equity: Evidence from plant closure," Journal of Financial Economics, Elsevier, vol. 117(1), pages 77-97.
    12. Wayne A. Grove & Andrew Hussey & Michael Jetter, 2011. "The Gender Pay Gap Beyond Human Capital: Heterogeneity in Noncognitive Skills and in Labor Market Tastes," Journal of Human Resources, University of Wisconsin Press, vol. 46(4), pages 827-874.

    More about this item

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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