Economic Trends and Outlook for 2020 – The Gender Wage Gap from a business school view
By Karen Crowley and Marianne LaPorte, FWSF MarComm Committee
On Thursday, January 30th, at The City Club, Financial Women of San Francisco (FSWF) hosted Dean Ann E. Harrison, Dean of the Haas School of Business, University of California Berkley at our Annual Economic Outlook event, part of FWSF’s Industry Leadership Series. At this breakfast meeting, 165 people listened as Dean Harrison talked about how the gender gap in the U.S. over the last 40 years narrowed in the 1980’s and has since remained stagnant.
Economic Trend
To show this economic trend, Dean Harrison prepared slides showing the hard data on gender pay gap over time, the leaky pipeline in economics, data on the gender pay gaps for Economists, Lawyers and MBA’s and made recommendations on what can be done to solve for the problem. She noted that her focus on this population is in part because there is good data available, and that the pay gap is bigger at the top of the pay scale. Dean Harrison shared her concerns for this economic trend. Between the 1990s and 2018 (the last year for which we have data) the percentage of women entering economics is almost flat. Without an increase to more closely reflect the percentage of women in our population, women will continue to have limited influence in setting economic policy. Furthermore, younger girls and women do not have enough role models in the field.
Pinpointing the Wage Gap Causes
Dean Harrison identified three explanations for women’s limited role in Economics: 1) the growing mathematical focus; 2) evidence of discrimination in promotions, and 3) timing (corresponding with child-rearing years). She cited a study in which girls have accepted and internalized the bias that they are not good at math and give up more easily than boys. To address the increased focus on math, Dean Harrison suggested broadcasting numbers and raising awareness, countering internalized bias by telling women they can do math, promoting diversity and inclusion at all levels, and mentorship programs. Remarkably, participation in two-day mentoring workshop for female assistant professors increased women’s probability of a tenured or tenure track job in a top 100 institution by 57% and probability of getting tenure at top 30 institution by 77%.
Dean Harrison then addressed pay gaps at the higher end of the pay scale. Although women are thought not to negotiate for better compensation as much as men, this may be a stereotype more than reality. Among 990 Haas MBA graduates between 2015 and 2019, a higher proportion of women than men negotiated job offers. Failure to negotiate is not the main driver of average wage gaps at the high end. A large portion of the pay gap for MBAs and lawyers comes from huge penalty associated with leaving the labor force and working fewer hours.
Solutions for women
Solutions to narrow the pay gap include 1) Increased awareness of the large penalty to leaving the labor force or going part-time; 2) Better, more affordable childcare options, and 3) Supporting “growth mindsets” that facilitate changing gender roles in the home and in the workplace. Dean Harrison shared a playbook on from the Haas students and the Center for Equity Gender and Leadership (EGAL)
After Dean Harrison’s prepared remarks, she engaged with the audience in a lively discussion on the need for better reporting of compensation data, the impact on race on the figures cited, the long term wealth impact of the gender wage gap, and the effect of the parental leave stigma on all workers
About Dean Ann Harrison
It was a great honor to have Dean Harrison as our guest speaker at this signature event in the financial community. Ann E. Harrison became the 15th dean of UC Berkeley's Haas School of Business on January 1, 2019. A renowned economist, she has dedicated her career to creating inclusive and sustainable policies in development economics, international trade, and global labor markets. Dean Harrison came to Haas from the University of Pennsylvania's Wharton School, where she was a professor of multinational management and business economics and public policy. She has held positions at other prestigious universities as well. Before joining Wharton in 2012, she was the director of development policy at World Bank, where she co-managed a team of 300 researchers and staff. She is the author of dozens of articles and editor of several books, including Globalization and Poverty and The Factory-Free Economy: Outsourcing, Servitization, and the Future of Industry. In 2017, she and her colleagues were awarded the prestigious Sun Yefang Prize by the Chinese Academy of Social Sciences for best research in economics on China. Dean Harrison has been interviewed about global trade policies and manufacturing by top publications, including Bloomberg, The New York Times, and The Los Angeles Times. She earned her PhD in economics from Princeton University and her bachelor's degree from UC Berkeley with a double major in economics and history. She also holds a DEUG (Diplome d'Etudes Universitaires Generales).
A special thank you to FWSF Industry Leadership chair, Maureen Young, and her committee, which developed this exciting program.