LeadershipBroadsheetDiversity and InclusionCareersVenture Capital

Female MBAs Face a $400,000 Gender Pay Gap

April 1, 2016, 8:46 PM UTC
Woman dangling crumpled banknote above man's palm, close-up, side view
Photograph by Hans Neleman — Getty Images

It doesn’t take a business school degree to understand that missing out on $400,000 is a bad thing.

Yet that’s the typical amount that female MBAs leave on the table over the 20 years after graduation when compared to their male counterparts, according to a new study from the Graduate Management Admission Council (GMAC).

In a salary analysis that looked at the earnings of more than 14,000 graduate business school alumni, GMAC found that female alumni experience a significant wage gap throughout their careers. That gap is at its narrowest in entry-level jobs—the type most often held immediately after graduation—and increases as women move up the ranks. It’s at its widest in executive-level roles, when women earned an average $165,000 to men’s $205,000, or 80 cents to the men’s dollar.

Female alums also lag behind when it comes to job level. Among graduates of two-year, full-time programs, men outnumber women in executive roles by roughly 2 to 1, and in C-suite jobs by a whopping 4 to 1.

Interestingly, both men and women say that earning their degree has been financially rewarding (70% for women, 77% for men) and both genders report a median post-graduation salary bump of $20,000. GMAC researchers conclude that a significant part of the wage gap comes from the fact that women enter b-school with lower salaries. But while the degree may provide a gender-blind boost, the fact that the pay differential grows as female alumnae rise up the ranks is clear evidence that an MBA is not enough to blunt the factors that drive the gap.