The U.S. Census Bureau estimates women earn 82 cents for every dollar earned by a man. When CNBC Make It spoke with economists in 2019 about the causes behind this gender pay gap, several pointed to the educational and career choices women make.
While women outnumber men at all levels of education, some say the pay gap can be in part explained by women historically pursuing degrees and careers in lower-paying fields such social work. Others have suggested that women tend to earn less than men because they are more likely to prioritize family responsibilities throughout their careers.
New research from the National Association of Colleges and Employers adds important context to these claims.
As a part of their annual research, NACE analyzed the post-college outcomes of hundreds of thousands of members of the college class of 2020 and found that women earned $52,266 on average while men earned $64,022 on average. Non-binary graduates earned closer to $45,099 on average.
“The salary gap between men and women begins as graduates exit college for the world of work,” explains Shawn VanDerziel, NACE executive director, in a statement. “That gap — with women earning approximately 82% of what men do — is in line with the figure the U.S. Bureau of Labor Statistics has reported as the pay difference between men and women. Consequently, our study dispels the myth that the gender pay gap results from women prioritizing family over career and thus begins later. We’re seeing the disparity right at the beginning of a woman’s career.”
The researchers also found that field of study did not fully explain why men earn more than women.
“That’s also a misconception,” says VanDerziel. “What we found is that academic major accounts for some but not all of the disparity. Moreover, one has to consider whether women choose lower-paying majors or whether certain majors are lower-paying because women dominate. There is a compelling case that gender discrimination underlies the gap.”
This dynamic is what researchers such as Nicole Smith, research professor and chief economist at the Georgetown University Center on Education and the Workforce often describe as “occupational segregation.”
“We still have women making personal decisions to pursue degrees that pay less,” Smith previously explained to CNBC Make It, listing care-giving fields such as teaching and nursing as examples of lower-paying degrees — and then occupations — that women pursue disproportionately. “We still have occupational segregation, which yes, it is a personal decision, but it’s also driven by socioeconomic challenges, and it is also driven by expectations about what roles women should play in society.”
“Occupational segregation” is just one factor that contributes to the current pay gap, said Smith. When Georgetown’s CEW looked at salaries among individuals in the same industries with the same jobs and exact the same level of education, Smith and her team found that women still earn about 92 cents for every dollar a man makes.
Fortunately, VanDerziel says there are steps every organization can take to help close the gender pay gap.
“First, standardize pay and eliminate the discretion to set salaries for new hires,” he says. “And, second, conduct an annual pay-equity analysis to determine if there are salary differentials correlated to gender or race/ethnicity, and, if so, take immediate action where needed.”
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