by Edwin W. Koc
NACE Journal, April 2011
The proportion of women in the work force has been growing for years. So, how do they fare in the college hiring process—do they have access to jobs to the same extent as male graduates? And are they paid the same level of starting salary as their male colleagues?
How significant is the issue of gender in the college hiring process? Examining the trends in bachelor’s degree completions, the role that women play in the future professional work force of the United States will be crucial, if not dominant. Between 2003 and 2009 women averaged 57.3 percent of bachelor’s degree graduates at all four-year, degree-granting institutions in the United States. The ratio of men to women graduates hardly deviated in any of these years. The percentage of graduates who were women ranged from a low of 57.2 percent to a high of 57.5 percent for the period. All things being equal, this means that eventually the college-educated professional labor force in the United States would become predominantly female.
Trends in the direction of a majority female professional work force are clearly underway. Figure 1 shows the trends in the female proportion of the college-educated civilian work force for various age categories since 1994. As indicated in this figure, the proportion of the labor force that is female has increased for every age group during this period. For the age category 20 to 24, young, entry-level employees, women have been a majority of the college-educated workers throughout the period. The proportion that is female has increased from 56.4 percent in 1994 to 59 percent at the end of 2010. For the next age category (25-34, young, experienced professionals) the percent of the work force that is female has moved from being a minority (47.8 percent) in 1994 to majority status (53.9 percent) in 2010. Finally, for the age group 35-44 (mid-career professionals) women still remain a minority of the professional work force, although the trends indicate that may change in the near future. The percentage of the 35-44 college-educated labor force that is female has grown from 43.9 percent in 1994 to just over 48 percent in 2010.1
Given the growing presence of women in the professional work force, it is relevant to ask how they fare in the college hiring process. Do they have access to jobs to the same degree as male graduates? Are they paid the same level of starting salary as their male colleagues?
Gender and Hiring
When it comes to hiring new female bachelor’s degree holders into the work force the data provide a definitively ambiguous picture. Unemployment data from the Bureau of Labor Statistics (BLS) suggest that young female bachelor’s degree holders seem more than capable of competing for jobs with their male counterparts. In every year since 1994, with the exception of 2000, the female unemployment rate has been lower than the male rate. (See Figure 2.) In fact, the trend line indicates that the differential between men and women in this college age group is increasing. Between 1994 and 2000, the average ratio of the male unemployment rate to the female unemployment rate for “new” college graduates was 1.27; since 2000 the average ratio of the male unemployment rate to the female unemployment rate has grown to 1.32.2 In 2010 with the college unemployment rate at its peak, the female unemployment rate was 8.1 percent, the highest recorded for this group. However, the male unemployment rate for young college graduates was a staggering 10.3 percent. The male rate was also the highest recorded to that date and about equal to the general unemployment rate for all educational levels.3
Before jumping to the conclusion that female new college graduates do better than male graduates in finding jobs immediately after graduation, we need to be careful about the limitations of the BLS data. The information from BLS tells us that women who choose to enter the work force (look for a job) closely after receiving their degrees are more likely to be employed at some level than are men who choose to enter the work force after getting their degrees. The data say nothing about the kind of employment women find as opposed to men, or whether that employment is full time. It could be that the unemployment rates for female new graduates are lower than their male counterparts simply because women are much more open to accepting part-time or temporary work than are men.
Data from the NACE 2010 Recruiting Benchmarks Survey provide a somewhat different picture for the hiring prospects of female new graduates as opposed to males. Figure 3 details the percentage of recruits that come from various diversity categories compared with the percentage of bachelor’s degree graduates represented by those groups from the Class of 2009—the most recent class for which these data can be calculated.
The figure shows that percentage of female hires falls far short of the percentage available from the graduating class. This is true whether or not the firm had a diversity hiring program in place. In fact, the figure indicates that diversity hiring programs may actually work to the disadvantage of females. Firms with diversity recruiting efforts hire a smaller percentage of female new graduates than are either available in the population overall or are hired by firms without diversity recruiting efforts. Thirty-four percent of new college hires by firms that have diversity recruiting efforts were females. By comparison, approximately 41 percent of new college hires by firms without diversity efforts were female and the overall base of graduates was 57 percent female.4
The data from the NACE 2010 Recruiting Benchmarks Survey suggest that female graduates have a difficult time getting hired in professional positions corresponding to their level of education, at least in comparison with male graduates. However, the data do not indicate whether the relative shortfall in female hires is the result of their being female or because of some ancillary, but more relevant, job issue, such as the academic majors of female graduates.
Because there is a strong correlation between academic major and gender, there is always a question as to what is actually the determining influence on a particular action, i.e., is getting an offer influenced more by the major or by the fact that so great a proportion of the majors are either male or female? To test the relative influence of the two interrelated variables, we took a look at the relative frequency of offers for men and women within each of the majors. Figure 4 shows the results of these breakouts.
The detail from the figure shows very little systematic effect based on gender. There are instances where male graduates perform significantly better than female graduates, e.g., healthcare, but there are examples of the direct opposite—male graduates doing significantly worse than their female counterparts, such as in English. However, the gender difference in the percent receiving offers is negligible once academic major is taken into account.5
Gender and Salaries
If gender has little independent effect on hiring, does the same hold true for compensation? Are there differences between what male and female new college graduates get paid? Are the differences that we see due more to the choices women make than any systematic differences between young male and female professionals?
First, that women in general earn less than men regardless of the level of education can hardly be disputed. Data from the BLS clearly point to a significant differential in the earning power of men and women. For example, in 2010 the median weekly wage of women with a high school degree, but no college was $543, or 76.5 percent of the median weekly wage of males with the same educational background—$710. The same differential held for men and women with bachelor’s degrees. Women with a bachelor’s degree earned $909 a week; men with a bachelor’s degree earned $1,188 a week. Again, the female median wage was only 76.5 percent of the male median compensation.6
The problem with applying these data to identifying gender differences in compensation among new college graduates is that the BLS figures include all workers above the age of 25. Many older female college graduates suffer from a legacy of previous wage discrimination; life choices that impacted individual earnings during their career; and hiring opportunities that limited their chance to make full use of their college degree. The problem we are trying to identify is whether the gender pay differential continues to exist, even for female graduates just entering the workplace.
Data from the NACE 2010 Student Survey provide a more precise picture of gender differences when it comes to salary. Figure 5 details the median starting salary offer based on gender for seniors who responded to the 2010 survey. The figure shows a sizable difference between male and female graduates when it comes to starting salary offers. The median starting salary offer received by female graduates from the class of 2010 was nearly $8,000 less than for male graduates, or about 83 percent of the overall median for males.7
However, as with hiring, the question still remains whether compensation differences are truly gender based or the result of men and women simply choosing different majors where the majors chosen by men are likely to be better paid than those chosen by women. That is an argument frequently floated by those who maintain that gender differences in compensation no longer truly exist. The differences one observes are more a matter of choice—the fields women choose to go into—rather than real differences in the level of pay offered to men as opposed to women.
Fields of study and occupation are clearly linked to compensation. Career-oriented fields, such as engineering or business, traditionally pay more at the start of a career than the traditional academically oriented liberal arts disciplines. It is also true that women are less likely to be found as graduates in many career-oriented disciplines, but are the wage differentials we observe among these disciplines simply connected with their being career-oriented, or is the prevalence of women in some disciplines another reason why compensation levels may be lower?
Figure 6 displays the median starting salary offers from the 2010 Student Survey for six career-oriented majors. Along with the offers it also shows the percent of female graduates in those fields. The data from the figure suggest that fields where the graduates are predominantly women tend to pay considerably less than the fields where the graduates are predominantly men. The average of the salaries in the disciplines where men represent the majority of the graduates is $52,116. By contrast, the average in the disciplines where women were the majority of the graduates is $38,492. The female-dominated career disciplines had starting salary offers that were 26.1 percent less than the offers made in male-dominated fields.8
Although the data in Figure 6 suggest a gender effect on the economic value placed on particular majors or occupations, there are certainly other factors at work in the economy that affect the value placed on particular knowledge sets. To identify whether gender has an independent impact apart from major, we need to probe for starting salary differences within majors. If gender differences in starting salary offers persist even when seniors are graduating in the same academic discipline, there will be relatively strong evidence that gender continues to play a role in the level of compensation offered to new graduates.
In the 2010 Student Survey report, the median salary by gender for each academic major is broken out. (See Figure 7.)
While the relationship between gender and actual starting salary offer is not absolute, it is retained for the most part. (See Figure 7.) For all but two of the majors where there are sufficient data to compare male and female salary offers, the median starting salary offered to male graduates was higher than for female graduates. The only two anomalies were engineering and generic liberal arts/humanities majors.Engineering is explained by the fact that the discipline has such a small percentage of women graduates that the women who do graduate from this field are highly sought after “commodities” and command a premium price for their services.9 The higher salary offers to female graduates in engineering have been showing up for the past couple of years in salary surveys of new college graduates.10
Although the campaign to ratify the Equal Rights Amendment to the Constitution died in the mid-1970s, women have continued to make strides in the workplace. Women appear to be as likely to be hired as men, and generally fared better in the labor market during the recent recession than males. The differential in pay between men and women, although still substantial, has declined. In 2000, women with a bachelor’s degree earned 74.4 percent of what their male counterparts earned. By 2010, women in this category earned 76.5 percent of the average male weekly wage. Progress exists, although it seems slow and incremental.
The slow rate of progress in this area is frequently explained by arguments centered on older women. Women who entered the work force at the time the Equal Rights Amendment died were certainly underpaid, and they carried that burden forward throughout their careers. Consequently, the theory goes, the overall statistics that show a continuing lag in compensation for women with equal levels of education to men are principally a product of history, and the differential will fade away as time goes by.
Another frequently cited explanation that relies on somewhat older women is the choice many women make to leave the labor force to start a family. This generally occurs at a point where a career is about to take off and the individual should start seeing significant increases in compensation. The overall levels of female compensation are therefore lower because these women voluntarily chose to have lesser economic careers, according to this explanation.
Both of these explanations appear to have some validity and some impact on the overall gender differential. However, they do not explain the lower starting salaries that women still encounter when they begin their careers after graduating college. The data presented here are not definitive but they are consistent in building a prima facie case that wage discrimination based on gender continues to exist and will likely persist unless measures are developed to adequately protect women—the coming majority of America’s professional work force.
1 Data are derived from the Bureau of Labor Statistics, Table 10: Employment status of the civilian noninstitutional population by educational attainment, age, sex, race, and Hispanic or Latino and Non-Hispanic ethnicity, 1994 – December, 2010 (Source: Current Population Survey).
2 Edwin Koc, “Evolution of the College Labor Market,” NACE Journal, April 2010.
3 Bureau of Labor Statistics, Table 10: Employment status of the civilian noninstitutional population by educational attainment, age, sex, race, and Hispanic or Latino and Non-Hispanic ethnicity, 1994 – December, 2010 (Source: Current Population Survey).
4 NACE, 2010 Recruiting Benchmarks Survey, Bethlehem, PA: National Association of Colleges and Employers, October 2010.
5 NACE, Moving On: Student Approaches and Attitudes Toward the Job Market for the College Class of 2010, Bethlehem, PA: National Association of Colleges and Employers, September 2010.
6 Bureau of Labor Statistics, Weekly and Hourly Earnings from the Current Population Survey, 2010.
7 NACE, Moving On.
8 NACE, Moving On.
9 NACE, Moving On.
10 NACE, Salary Survey, A Study of 2008-2009 Beginning Offers, Bethlehem, PA, September 2009.
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