The Wage Gap: Why Men Earn More

Which college majors have the biggest wage gap between men and women? According to a New York Times analysis of data from PayScale,  the leading fields are: architecture, education, and criminal justice-with men earning 5 percent more than women. Business is a close second: Business and marketing/management have a 4 percent wage gap, while finance and accounting have a 3 percent gap.

The Times took a stab at explaining the gaps by trying to determine if the gender composition of the majors had an impact on the pay gap—it doesn’t.

But something else might. Each major can lead to any number of careers, and the pay levels for careers can vary wildly. So if men and women studying business pursue different career paths, it will affect their pay and ultimately the wage gap for that major.

To find out if this was the case, we analyzed data from our 2011 survey of U.S. business schools—the same survey we used for our most recent ranking of undergraduate business programs. (PayScale collected its data from online pay comparison tools.) Our sample included more than 20,000 graduating seniors from 139 schools who disclosed both their gender and their future career plans.

What did the data tell us? For starters, the numbers show that male business graduates are more likely than female business graduates to pursue careers in finance and consulting, while women were more likely to pursue careers in HR and marketing. The largest number of respondents, 5,623, indicated they planned to pursue careers in finance, where men outnumbered women 70 percent to 30 percent. The next largest group, marketing, accounted for 4,048 graduates, and women outnumbered men 66 percent to 34 percent. Accounting, the third largest group, was almost evenly split.

According to the National Association of Colleges and Employers, salaries for all business majors now average $48,144, but pay varies widely based on major (accounting, business administration, etc.) and industry. For example, a business administration graduate working in the retail industry, where most end up, can expect an annual salary of about $35,190, while one who goes to work for a hospital will earn $60,040.

So is the Times data surprising? Not really. If more men are using their business degrees to pursue careers in finance and consulting, more will end up working in some of the highest-paying industries. And if more women are pursuing careers in HR and marketing,  more will find themselves working in lower-paying industries.

The pay gap then, isn’t entirely a function of discrimination against women, although I’m sure there’s probably some of that too. It’s largely a function of the choices men and women make. There may be perfectly good tactical reasons for those choices—the need to repay student loans or the desire to start a family, for example. But they have consequences, and one of them may be a bigger (or smaller) paycheck.

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