How to Explain the Gender Gap

According to a new McKinsey/LeanIn report, where women wind up at work depends on how they began. The key is an early promotion to a management position.

Below, you can see the share of women at each rung of the corporate pipeline ladder:

The Corporate Ladder

However, women also need to occupy more than an entry level management position because the women that are responsible for operational responsibilities have more of a chance to become a CEO. Instead though, women are likely to work in a human resources position.

Mary Barra, GM’s CEO is most often cited because of her background. Before ascending to the top, she was a Vice President for Global product development. At the entry level after college, she was an engineer for Pontiac.

Viewed through the race lens, we see White women more likely to get an early managerial position. Asian women have fared well initially but not later in their careers. Meanwhile, Black women’s promotion rates have sunk to 2020 levels and Latinas women lag everyone else.

Programs that support women’s corporate support have declined:

And you can see why corporate support programs are necessary:

Our Bottom Line: The Gender Pay Gap

One result is gender inequality. Persisting, women’s median weekly earnings–the gender pay gap–averaged between 80% and 84% since 2004. The one occupation with some equity is community and social service jobs:

As economists, we can conclude with production possibilities graphs. An illustration of the maximum potential of a community’s or firm’s land, labor, and capital, production possibilities graphs can also display underutilization. Shown by the dot inside the curve, when you reduce what female employees can achieve, you are also contracting your firm’s potential.

Your axes could be any pair of goods and services (or categories) that the company produces:

My sources and more: Thanks to WSJ for inspiring a post that took us to the gender pay gap and beyond. However, I do recommend some fact checking at BLS.. From there, for more detail, this McKinsey/LeanIn annual report was ideal. But finally, to complete the picture, do take a look at this past post on Claudia Goldin.