Women Make Less Than Men, and the Gap Starts at Graduation

Moneybox
A blog about business and economics.
May 29 2014 11:47 AM

The Pay Gap for Women Starts at Graduation

88203984-harvard-university-students-attend-commencement
Still a Harvard-to-Radcliffe gender divide.

Photo by Darren McCollester/Getty Images

This story originally appeared on Inc.

Nationally, women make just 77 cents for every dollar made by men. But it's long been unclear just why this pay gap persists. Do women make less than men because they choose to go into less lucrative professions and work fewer hours, or do they make less because they’re discriminated against no matter which field they choose and how hard they work?

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New data from Harvard University's most recent graduating class suggests that the answer to that crucial question is yes and yes. Women choose fields that don't pay as well, but even within highly paid fields such as finance and engineering, they get paid less than men.

The fact that a distinct pay gap is evident right out of undergraduate school is more than a little sobering. At the age of 21 or 22, it's extremely unlikely that the male graduates had somehow acquired relevant experience that merits above-average pay, or that the women are working fewer hours to accommodate their families.

The Harvard Crimson conducted its annual survey of Harvard's newest graduating class this May. Some 758 students responded, which is nearly half the graduating class.

The survey found that men were about twice as likely to choose finance, technology, or engineering—all highly paid fields—for their first jobs. Eleven percent of women chose engineering or technology, versus 19 percent of men. Ten percent of women chose finance, compared with 24 percent of men.

Women were twice as likely to choose public service or not-for-profits, which don't pay as well. Equal numbers of men and women chose consulting.

Across all fields, 19 percent of men said they would be making $90,000 or more after graduation, compared with 4 percent of women. It's easy to look at that stat and say, OK, that's because there are more guys in banking, engineering, and tech.

But here's the thing: The survey says "a plurality" of women in technology and engineering said they will be making between $50,000 and $69,999. The guys in the same field? A plurality said they would be making between $90,000 and $109,999. At the low end, that's an 80 percent difference. But 80 percent is ridiculous. At the high end it's 57 percent. That's insane, too.

I realize there's a difference between "a plurality" and "the average," and the Crimson didn’t report an "average" number. So the actual gap between the average salaries could be much smaller. But given that the salary ranges are so far apart, the pay gap is still going to be substantial even if we could look at averages.

Among those going into finance, 29 percent of the men said they'd be earning $90,000 or more. None of the women were. Not one.

I’ve called Harvard for their take on this and will update the story if I get a response.

I have never hired an engineer. But many of our readers have. I would absolutely love to know what could possibly account for such a large pay gap between men and women just coming out of school. If you have any ideas, won't you please tell us in the comments?

By the way, in 10 years, about 10 percent of the class of 2014 said they thought they'd be entrepreneurs. Maybe those will be the underpaid women engineers deciding it's time to take over the world.

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