Students graduating during the pandemic

Field Work

Women Faster to Accept Jobs. Pay Suffers

Women attend college at higher rates than men. Women’s labor force participation was also fairly steady prior to COVID, while men’s declined, and women continue to move into fields traditionally held by men.

Despite all this progress, women still earn much less than men.

Discrimination partly explains the pay gap, as does motherhood, which can interrupt the smooth progression in women’s careers at a critical time. But another explanation doesn’t get as much attention: women earn less because they’re not as confident as men about how much they can get and are more afraid of taking some risks in negotiations with employers.

In the 2018 and 2019 graduating classes at Boston University’s Questrom School of Business, women started their job searches earlier and accepted employers’ offers more quickly, according to a new analysis of student surveys before graduation and after they’d landed a job.

Men, on the other hand, do take risks, extending the negotiation with employers to see how much they can secure or even rejecting a job in hopes that a better one comes along.

Prior to graduating, nearly two-thirds of the women in BU’s business school had accepted a job during their junior or senior years but only about half of the men had, the researchers found.

The male students also enter their pay negotiations with higher expectations of what they want to earn. Their optimism, verging on overconfidence, serves them well. Male graduates from the BU business school earned about $6,700 more, on average, than their female classmates.

Men’s natural advantages in two psychological attributes – optimism and a willingness to take risks – “play a non-trivial role in generating early career earnings gaps among the highly skilled,” the study concluded.

The problem with women starting out at a lower salary level is that they may never catch up over the course of their careers, because the first job out of college establishes a foundation for future raises and future job negotiations. The post-graduation disparity between men’s and women’s pay “will naturally persist” over many years, the researchers said.

Men’s overconfidence about their future earnings does have a downside: they expressed more disappointment with their pay in post-graduation surveys than the women.

But what’s a little disappointment if it means more money?

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2 Responses to Women Faster to Accept Jobs. Pay Suffers

  1. Janet Brazelton says:

    Fascinating and it matches the experiences I had in college. I believe women are more likely to choose a major based on how well they do in classes (i.e. grades received), while men are not as deterred by poor grades. Their confidence keeps them in “difficult” and higher paying majors such as computer science. Obviously subtle discrimination also comes into play where women receiving “good enough” grades may be discouraged from continuing. Overconfidence in men receiving poor grades keeps them in these majors.

    • Ken Pidcock says:

      There is much to that. I remember attending a presentation to teachers on encouraging women to pursue careers in science and engineering. The presenter related how, while drawn to engineering in her youth, she was nevertheless led to consider changing her major once she started college. It wasn’t grades so much – she did well on exams – as a sense that she wasn’t mastering the material. In any event, the presenter, at the time I heard her presentation, was chair of Electrical Engineering at Lehigh University. One can assume that her youthful hesitancy was misplaced and hope that, in time, fewer women will experience her hesitancy.

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