new research in enduring discussion: who earns more?

Is the race over?

For years it seemed common knowledge that women earn less than men. But a report by CondeNast, citing research by Carnegie Mellon University shows some puzzling statistics. The report shows that at all levels in the corporate executive hierarchy -from Vice Presidents to CEO’s - women get paid slightly more than men, while getting promoted at the same rates.

Good news it seems, as it could mean gender no longer plays a role in earning. But that would be a too hasty conclusion, as these aggregate numbers hide the fact that female executives are more likely to quit their jobs earlier on in life. This means a higher proportion of men will be promoted at any given rank. And if wages go up with promotions, which they do, then men will get paid more than women on average.

To get to the latter conclusion, researchers looked at the earnings data and career path of thousands of executives over the period between 1992 and 2006. They found that if two executives, one male and one female, are the same age and have the same education, work experience, and rank, then “women are paid slightly more than males, enjoy less wage volatility due to abnormal returns, and are equally likely to be promoted within the..firm.”

The researchers confirmed however, that female executives are more likely to quit their jobs sooner. Unfortunately it is unclear why this happens, although the researchers rejected ‘raising children’ as being the reason women quit their jobs more easily than men. It could still be that certain work cultures are perceived as too demanding to women, but it could also be that having children is an added factor in making women get out of work before reaching top level executive positions.

Any other suggestions?