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Female MBA grads earn less at career outset, struggle to catch up: study

A new catalyst study says female MBA grads earn less than their male counterparts at the outset of their careers.

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Female MBA graduates in Canada are starting their careers behind their male classmates and are continuing to fall behind as the years pass, making it harder for women in advance to higher-level business positions.

A new report by women's advocacy group Catalyst shows female MBA graduates in Canada earn $8,167 per year less than their male colleagues in their first jobs after graduation, according to data on 1,574 students who graduated between 1996 and 2007.

The pay gap is far larger in Canada than internationally, where Catalyst says women MBA grads earn $4,600 less on average in their first jobs.

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"To me the pay numbers are a huge red flag.... It's a big sample size, and that's a significant difference with the average global gap," Catalyst Canada executive director Alex Johnston said in an interview. "I would be concerned about that as a business leader."

Catalyst has been tracking and reporting on 10,000 international MBA graduates for the past six years, but released its first Canada-specific study Tuesday to highlight the Canadian findings.

The study found 72 per cent of female MBA graduates in Canada began their first jobs in entry-level positions, compared with 58 per cent of men, and said the divide is consistent even among graduates who said they aspire to become senior executives or CEOs.

Women were also less likely to get to work on high-visibility projects or hold mission-critical roles that predict advancement, and women in Canada received fewer international assignments than men or graduates in Europe and Asia.

The survey showed 29 per cent of male MBA graduates received international assignments compared to 19 per cent of women, while 94 per cent of men said they had opportunities for extensive international travel without relocation compared to 79 per cent of women.

Both men and women MBA graduates in Canada had fewer international assignments than graduates in Europe or Asia, where 39 per cent and 45 per cent respectively reported having international assignments.

The study also found both men and women MBA graduates in Canada were more likely than peers in other countries to choose non-corporate careers in the public sector or at non-profit organizations, but women were far more likely to eschew corporate jobs than men, with 19 per cent of women MBAs starting at a non-corporate firm compared to 8 per cent of men.

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Ms. Johnston said some graduates cite greater job security and benefits such as a pension plan for choosing the public sector, while others say the nature of the work suited them because they want to make a difference in the world.

But she said statistics also show that women are far more likely to end up in senior jobs -- including CEO positions -- in the public sector than in the corporate world.

"You don't think a 28-year-old graduating is looking at organizations and seeing if she sees herself reflected in those organizations?" Ms. Johnson said.

"If she doesn't see herself, her choices will be impacted by that. As a business leader I'd be worried about the health of my organization today, but I'd also be concerned about recruiting young graduates in the numbers I want to recruit them because they're looking at organizations and saying, 'Do they reflect my values, do I see myself building a career there?'"

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About the Author
Real Estate Reporter

Janet McFarland is the real estate reporter for The Globe and Mail’s Report on Business, with a focus on residential real estate trends. She joined Report on Business in 1995, and has specialized in reporting on corporate governance, executive compensation, pension policy, business law, securities regulation and enforcement of white-collar crime. More

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