Explaining lower incomes for female MBAs. Babies.

We were quite interested to read Booth professor Marianne Bertrand’s recent paper Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors. Bertrand and her co-authors, Goldin and Katz, find an ongoing divergence in the earnings income of male and female MBAs after graduation primary attributable to the decision to have children. A few excerpts of interest:

• Income is nearly identical after graduation but there is a considerable gap by 10-16 years later
• The portion of female MBAs not working rises in the decade after graduation
• Women with children work 24% fewer weekly hours compared to men. Women without children work 3.3% fewer hours.
• MBA mothers slow down in the years following birth, not preceding.
• Women with high-earning spouses reduce their labor participation far more than those with lower-earning spouses.
• A substantial number of women not working full-time are working part-time, largely through self-employment. At 10-16 years after graduation, 20% of Booth female graduates surveyed were self-employed compared to 14% of men.
• The authors find little evidence that women are forced out of work due to discrimination but rather it is due to their personal preferences (also commented on here)

Mothers at Booth is committed to helping women understand the full ramifications of childbearing decisions and appreciates the insights this study lends into the reality of motherhood after the MBA.