What’s the MBA impact for women and minorities? That’s the question that the Forté Foundation set out to answer in their most recent study.
Key Study Insights
After surveying 900 male and female MBA alumni who graduated between 2005 and 2017, they found mixed results. While an MBA might boost earning power and increase equality in the workplace for minorities, the same cannot be said for women, according to the study led by Michelle Wieser, Interim Dean of St. Catherine University’s School of Business.
- Post-MBA, the pay gap between men and women does not improve. Women still earn less. In fact, pre-MBA women earned 3 percent less than men, and post-MBA the deficit widened to 10 percent for their first job after an MBA and 28 percent for current compensation.
- Women report less job satisfaction post-MBA than their male counterparts. They don’t advance to the same level as men and have fewer direct reports.
- 34 percent of men and 65 percent of women think there’s a gender pay gap.
- Around 40 percent of respondents, primarily women, admitted to experiencing the gender pay gap. Unfortunately, these self-same respondents stated that they did not take action while others admitted to leaving the company.
- The gender pay gap in the study was 28 percent, representing $58,994 in annual compensation.
“While some salary disparity can be explained by the job functions women choose, there is likely unconscious bias and other factors at play,” Elissa Sangster, CEO of the Forté Foundation said in a press release. ” This is a wake-up call—companies need to take proactive steps to lessen the pay gap, or risk losing highly-skilled women employees.”
- For minority men and women, the MBA narrows the pay gap in their first post-MBA job and beyond—going from 24 percent pre-MBA to 16 percent post-MBA and 12 percent currently. However, minorities still earn less than non-minorities from pre-MBA to the present.
- Overall, minority MBA graduates have lower career satisfaction than non-minorities when it comes to current salary and career progression.
- The ROI of an MBA for minority women is 70 percent, and for minority men it’s 84 percent.
“It’s encouraging to see an MBA provides greater economic mobility for women and minorities and narrows the pay gap for minorities in their first job post MBA,” said Sangster, “but the whopping gender pay gap and income disparity for women and minorities needs to be addressed, and soon.”
Despite the gender and minority pay gap, the MBA still boasts a positive return on investment. There’s an over 63 percent salary bump or higher post-MBA for both minority and non-minority women. Though the salary boost for men post-MBA is higher at 75 percent.