Income inequality: What does the wage gap at elite institutions tells us?

Sep 16 2015 Published by under college, wage gap

Today my advisor pointed me to an article that describes how 10 years out, alumni of his alma mater are some of the highest earners in the country whereas graduates of my college are some of the lowest earners. Although I think he showed me this so that he could feel superior (why, any member of the National Academy of Sciences needs to continue to impress their superiority on anyone is beyond me), what struck me was that the gender pay gap at his alma mater is greater than the average salary of alums at mine.

Why could this be? Why would some of the most prestigious institutions in our country have the highest difference in pay between men and women?

The especially startling thing about it is that many of the Ivy League schools have not just higher wage gaps, but multiple times the size of the wage gaps at other schools. There are many reasons, including those beyond academic quality, that students from certain schools might have higher wages than other schools. Are the same factors that contribute to this (certain types of connections, reputation, etc.) affecting the wage gap?

On the other hand, could the factors known to keep women’s salaries on average lower, like time off to care for children and “leaning back” to be more present in the home, exacerbated at power schools? One could imagine women married to men with high earning potential and high career pressure being more likely to take a step back from their own careers.

I think that this survey of salaries raises more questions than it answers. However, perhaps digging into disparities such as these could help us understand more about the causes of income inequality.

4 responses so far

  • sweetscience says:

    Wow, this is interesting. Your advisor is... funny.

    One thing to consider is that the earnings info comes from students 10 years after attending, and it doesn't say that they excluded people without a job outside the home. So this is the prime age to find respondents who stay at home with young children (which will mostly be women), even if they had earned higher salaries previously, or plan to go back to work. Also, those families with a very high earner are more likely to be able to have one parent stay at home, so that might help explain the larger gender gap at the higher earning institutions compared to the others.

    This is just one potential contributor though, and I'm not trying to say we don't have major issues to address with the real wage gap that exists between working men and women!

  • AScientist says:

    Probably still a problem, but that linked article should be reporting median, not average, earnings since distribution is likely to be highly skewed.

  • becca says:

    It would be interesting to see this broken down by household income instead of wages earned- that might get at the issue of who is leaning out due to a spouse. Of course, it'd also be nice simply to see the data adjusted for discipline.

    If I have a daughter, I'll advise Georgetown or Duke over Princeton anyday. But then, I'd pretty much determined that from "Princeton Mom".

  • My guess is that this is because graduates of elite universities are vastly more likely to end up in careers that are hugely renumerative--hedge fund managers, CEOs, law- or consulting-firm partners, investment bankers, etc--and that are also hugely skewed in gender representation.

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