What is an MBA worth? It depends whether you are a man or a woman

It is MBA season, the time of year when graduates move back into the business world, hoping their hard work will propel them effortlessly to the top.

In November, we discussed the low number of women on MBA courses – fewer than a third, and remarkably unchanged for eight years. Various possible explanations have been mooted, including the unfortunate clash of MBA timing with child-bearing, the tendency for people to view MBAs as a route into the high-testosterone worlds of Wall Street and the City of London, and the fact that management as a discipline is a male-dominated field.

Penny de Valk, chief executive of the Institute of Leadership & Management, argued in the FT on May 23 that more flexibility in the structure of MBA courses, as in the workplace, may open the door to more women seeking higher degrees in management.

There is sense in all these arguments, but while female MBA graduates find they continue to earn significantly less than men, with fewer and less lucrative promotions, it must be asked why they should invest the considerable sums necessary to attend a second-tier school.

Catalyst, the US not-for-profit diversity group, has published research on the earnings gap between male and female MBA graduates beginning with their first job. Female graduates can expect to earn $4,600 less than their male peers, even after adjustments are made for academic records, prior career experience, industry, location and parenthood status.
The research also highlights that men are promoted more often and with greater salary hikes. According to data from 2008, men gained a 21 per cent compensation increase for each promotion, while women gained just 2 per cent.

Over a 40-year career, the impact of these earning disparities amounts to $431,000, Catalyst estimates – a shockingly high level of disparity.

The answer is not only to get more women on to MBA courses, but also to ensure there is sufficient pressure on companies to recognise women at work – and award them appropriately. And that simply means giving them the same breaks as their male colleagues.

This blog is no longer updated but it remains open as an archive.

The 'Women at the Top' blog is part of a series of online and print publications that focuses on women's achievements in business. With up-to-date news and incisive analysis, the blog will provoke discussion on the role of the world's most prominent businesswomen. www.ft.com/womenblog

For more Women at the Top news, video interviews and other features, visit www.ft.com/womenatthetop


About our bloggers

Liz Bolshaw

Liz Bolshaw is a business journalist and editor. She has been a successful book publisher, online editor, magazine editor and publisher.

She was launch editor of the Europe-wide online community Entrepreneur Country, has published magazines for PwC, 3i, dunhill and Bafta, and launched The Sharp Edge, a magazine for and about entrepreneurs, with Duncan Bannatyne. She is a regular contributor to Thomson Reuters’ Venture Capital Journal.

Her last project for the Financial Times was as editor of the paper’s Business Education magazine.

Rebecca Knight

Rebecca Knight is a freelance journalist based in Boston. She writes regularly for the FT on business education, entrepreneurship, and management.

Andrew Hill

Andrew Hill is an associate editor and the management editor of the FT. He was City editor of the FT and editor of the daily Lombard column on British business and finance from September 2006 to December 2010.

He was the FT’s financial editor from June 2005 to September 2006, with overall responsibility for coverage of companies and markets. Before becoming financial editor, he was the FT’s comment & analysis editor, in charge of the paper’s opinion and features pages.

From 1999 to 2003, he was the FT’s New York bureau chief. He joined the FT in 1988 and has also worked as foreign news editor, UK companies reporter and correspondent in Brussels and Milan.

Pino Bethencourt

Pino Bethencourt is a professor and leadership expert at IE Business School in Madrid. She is also an author and executive coach.

Lynda Gratton

Lynda Gratton is professor of management practice at London Business School.

Linda Tarr-Whelan

Linda Tarr-Whelan, former ambassador to the UN commission on the status of women, is a Demos distinguished senior fellow.