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Graduating to a Pay GapThe Earnings of Women and MenOne Year after College GraduationEmpowering women since 1881

Graduating to a Pay GapThe Earnings of Women and MenOne Year after College GraduationChristianne Corbett, M.A.Catherine Hill, Ph.D.

Published by AAUW1111 Sixteenth St. NWWashington, DC 20036www.aauw.orgconnect@aauw.org202.785.7700Copyright 2012 AAUWAll rights reservedPrinted in the United States of AmericaFirst printing: October 2012Library of Congress Control Number: 2012951114ISBN: 978-1-879922-43-3021-13 5M 10/12

This report was made possible byThe Mooneen Lecce Giving CircleThis giving circle honors the legacy of Mooneen Lecce, whose passion for themission of AAUW continues to inspire volunteerism and charitable givingdedicated to improving the lives of women and girls.andThe Eleanor Roosevelt FundThe generous donors to this fund support all of AAUW’s research initiatives.

ContentsForewordAcknowledgmentsAbout the AuthorsExecutive SummaryChapter 1. Why the Pay Gap MattersChapter 2. The Pay Gap, One Year after College GraduationChapter 3. High Student Loan Debt BurdenChapter 4. Narrowing the Pay GapAppendix. Methodology and Regression AnalysisBibliographyFiguresFigure 1: Average Annual Earnings One Year after College Graduation, by GenderFigure 2: Average Annual Earnings One Year after College Graduation,by Gender and Institution SectorFigure 3: Gender Composition of College MajorsFigure 4: College Major Choice, by GenderFigure 5: Average Annual Earnings One Year after College Graduation,by Undergraduate Major and GenderFigure 6: Employment Status One Year after College Graduation, by GenderFigure 7: Occupation One Year after College Graduation, by GenderFigure 8: Average Annual Earnings One Year after College Graduation,by Occupation and GenderFigure 9: Average Annual Earnings One Year after College Graduation,by Hours Worked and GenderFigure 10: The Pay Gap One Year after College Graduation, with andwithout Explanatory VariablesFigure 11: Student Loan Debt Burden One Year after College Graduation,by Year and GenderFigure 12: Share of Women and Men with High Student LoanDebt Burden One Year after College Graduation, by YearFigure 13: Significant Coefficients from Regression of Log of AnnualEarnings One Year after College Graduationviiixix159232735419111213141516171920242637

ForewordWomen are paid significantly less than men are in nearly every occupation. Because pay equity affectswomen and their families in all walks of life, it is not surprising that many women consider the issueimportant. Many business leaders also believe that pay equity is “good business,” because it improvesmorale and productivity. Yet progress in closing the gap between men’s and women’s pay has been slowand, in recent years, has stagnated.For more than 130 years, the American Association of University Women (AAUW) has advocatedfor gender equity in education and the workplace. During this time, women have gone from a smallminority on college campuses to a majority of the student body. Today, women make up half the workforce,but they continue to earn less than men do throughout their careers.Why does this gender pay gap persist? This question is a focal point of AAUW’s research and advocacywork. Graduating to a Pay Gap finds that women working full time already earn less than theirmale counterparts do just one year after college graduation. Taking a closer look at the data, we findthat women’s choices—college major, occupation, hours at work—do account for part of the pay gap.But about one-third of the gap remains unexplained, suggesting that bias and discrimination are stillproblems in the workplace.At AAUW, research informs action. As an organization of college-educated women, we believe thatthe pay gap among college-educated workers and its ramifications—starting with higher student loandebt burden immediately after college graduation—are of great importance. AAUW is proud to shareresearch that you can trust. We hope this report will inspire you to join us in taking action to eliminatethe pay gap.Carolyn H. GarfeinAAUW PresidentLinda D. Hallman, CAEAAUW Executive DirectorAAUWvii

AcknowledgmentsAAUW thanks Robin Henke and Jennie Woo of MPR Associates for their work on the technicalreport that provided the basis for the data analysis used in Graduating to a Pay Gap. We thank MattReed from the Project on Student Debt for his thoughtful comments on the student debt portionof the report. AAUW also recognizes its staff and member leaders for their contributions. Specialappreciation goes to Jill Birdwhistell, chief operating officer, for her role in shaping this work; JulieSmolinski, former research intern, for her work on the report’s figures; Rebecca Lanning, director ofart, editorial, and media, for managing the editorial process; Beth Pearsall, freelance editor, for editingthe report; and Allison VanKanegan, graphic designer, for designing and composing the report.Finally, AAUW thanks the members of its distinguished research advisory board for their thoughtfulcomments and guidance: Lauren Asher, Donna Bobbitt-Zeher, Kelvie Comer, Patricia Roos,Kimberlee Shauman, and Peggy Williams.About the AuthorsChristianne Corbett is a senior researcher at AAUW, where she writes aboutgender equity in education and the workplace. She is a co-author of AAUW’s WhySo Few? Women in Science, Technology, Engineering, and Mathematics (2010) and Wherethe Girls Are: The Facts about Gender Equity in Education (2008). Before coming toAAUW, she worked as a legislative fellow on Capitol Hill and as a mechanicaldesign engineer in the aerospace industry. Corbett holds a master’s degree incultural anthropology from the University of Colorado, Boulder, and bachelor’sdegrees in aerospace engineering and government from the University of NotreDame.Catherine Hill is AAUW’s director of research and the co-author of manyAAUW reports, including Crossing the Line: Sexual Harassment at School (2011), WhySo Few? Women in Science, Technology, Engineering, and Mathematics (2010), and Behindthe Pay Gap (2007). Previously, she was a researcher at the Institute for Women’sPolicy Research and an assistant professor at the University of Virginia. Hillearned bachelor’s and master’s degrees from Cornell University and a doctorate inpublic policy from Rutgers University.AAUWix

Executive SummaryNearly 50 years after the passage of the EqualPay Act of 1963, women continue to earnless than men do in nearly every occupation.Because pay is a fundamental part of everydaylife, enabling individuals to support themselvesand their families, the pay gap evokes passionatedebate. Although the data confirming thepersistence of the pay gap are incontrovertible,the reasons behind the gap remain the subject ofcontroversy. Do women earn less because theymake different choices than men do? Does discriminationplay a role? What other issues mightbe involved?Graduating to a Pay Gap explores the pay gapbetween male and female college graduatesworking full time one year after graduation.You might expect the pay gap between men andwomen in this group of workers of similar age,education, and family responsibilities to be smallor nonexistent. But in 2009—the most recentyear for which data are available—women oneyear out of college who were working full timeearned, on average, just 82 percent of what theirmale peers earned. After we control for hours,occupation, college major, employment sector,and other factors associated with pay, the paygap shrinks but does not disappear. About onethirdof the gap cannot be explained by any ofthe factors commonly understood to affect earnings,indicating that other factors that are moredifficult to identify—and likely more difficult tomeasure—contribute to the pay gap.Why do women graduate to a pay gap?Education and occupational differences betweenmen and women help explain the pay gap.Explaining or accounting for a portion of thepay gap simply means that we understand theeffect of certain factors, not that the genderdifferences related to those factors are necessarilyfair or problem-free. Both discriminationand cultural gender norms can play a role in the“explained” portion of the pay gap. With that inmind, we find that college major is an importantfactor driving pay differences. Men are morelikely than women to major in fields like engineeringand computer science, which typicallylead to higher-paying jobs. Women are morelikely than men to major in fields like educationand the social sciences, which typically lead toAAUW1

lower-paying jobs. But college major is not thefull story. One year after graduation, a pay gapexists between women and men who majoredin the same field. Among business majors, forexample, women earned just over $38,000, whilemen earned just over $45,000. Gender differencesin college major only partially explain thepay gap.Occupational factors also drive differences inpay. Although the choice of major is related tooccupation, the relationship is not strict. Forexample, male engineering majors are morelikely than their female counterparts to workas engineers after graduation. Women are morelikely than men to work in business support andadministrative assistance occupations and asteachers, social services professionals, and nursesand other health care providers one year aftercollege graduation. Men are more likely thanwomen to work in business and managementoccupations, computer and physical scienceoccupations, and as engineers. The jobs thatprimarily employ men tend to pay more than thejobs that primarily employ women.Differences in the number of hours worked alsoaffect earnings and contribute to the pay gap.One year out of college, women in full-time jobsreported working 43 hours per week on average,and men in full-time jobs reported working anaverage of 45 hours per week. Economic sectoris another part of the equation. Men were morelikely than women to work in higher-paying sectorsof the economy.Yet, when we control for each of these factors,women still tended to earn less than their malepeers did. Within a number of occupations,women already earned less than men earned justone year out of college. Among teachers, forexample, women earned 89 percent of what menearned. In business and management occupations,women earned 86 percent of what menearned; similarly, in sales occupations, womenearned just 77 percent of what their male peersearned.When we compare the earnings of men andwomen who reported working the same numberof hours, men earned more than women did. Forexample, among those who reported working40 hours per week, women earned 84 percent ofwhat men earned. Among those who reportedworking 45 hours per week, women’s earningswere 82 percent of men’s.Finally, when we control for economic sector,again men typically earned more than womendid. In the two largest economic sectors—thefor-profit and government sectors—men earnedsignificantly more than women did one year aftercollege graduation. Occupation, hours worked,and economic sector help us understand the paygap, but these differences do not fully explain it.What accounts for the unexplained gap?Consider a hypothetical pair of graduates—oneman and one woman—from the same universitywho majored in the same field. One year later,both were working full time, the same numberof hours each week, in the same occupation andsector. Our analysis shows that despite thesesimilarities, the woman would earn about 7 percentless than the man would earn. Why dowomen still earn less than men do after we controlfor education and employment differences?Gender discrimination is one potential contributorto the unexplained pay gap. The increasingnumbers of claims filed with the Equal EmploymentOpportunity Commission and the millions2 Graduating to a Pay Gap

of dollars employers pay annually in awards,settlements, and other legal fees make clearthat gender discrimination remains a seriousproblem in American workplaces. Experimentalevidence confirms that many people continueto hold biases against women in the workplace,especially those who work in traditionally malefields. Thus, there are solid reasons to believethat gender discrimination is a problem in theworkplace.Yet discrimination is impossible to measuredirectly, and many who discriminate—both menand women—may not be aware that they aredoing so. For all of these reasons, it is likely thatat least part of the unexplained gap results fromdiscrimination.Another possible explanation for the unexplainedportion of the pay gap is a gender differencein willingness and ability to negotiatesalary. Negotiating a salary can make a differencein earnings, and men are more likely thanwomen to negotiate their salaries. In part, thisdifference may reflect women’s awareness thatemployers are likely to view negotiations by menmore favorably than negotiations by women.Nonetheless, negotiation may account for someportion of the unexplained gap.One immediate effect of the pay gap ishigh student loan debt burden.For many young women, the challenge of payingback student loans is their first encounterwith the pay gap. “Student loan debt burden” isdefined as the percentage of earnings devotedto student loan payments. A high student loandebt burden is an indicator that repayment maycreate hardship. Individuals with high studentloan debt burden are less likely to own a home,have a car loan, or even make rent payments.High student loan debt burden is a challengefor a growing number of college graduates, menand women alike, but is particularly widespreadamong women, in large part because of the paygap.Women and men pay the same amount for theircollege degrees, but they often do not reap thesame rewards. Among 2007–08 college graduates,women and men typically borrowed similaramounts to finance their educations, about$20,000. Because women earn less than men doafter college, student loan repayments make up alarger part of women’s earnings. In 2009, amongfull-time workers repaying their loans one yearafter college graduation, nearly half of women(47 percent) were paying more than 8 percent oftheir earnings toward student loan debt comparedwith 39 percent of men. These numbershave risen in recent years. In 2001, 38 percent ofwomen and 31 percent of men in the same situationwere paying more than 8 percent of theirearnings toward student loan debt. Among thosewith very high student loan debt burden, weagain see a gender difference. In 2009, 20 percentof women and 15 percent of men workingfull time and repaying their loans one year aftergraduation were paying more than 15 percent oftheir earnings toward student loan debt. Womenare more likely than men to have high studentloan debt burden in large part because of the paygap.RecommendationsWhat can be done about the pay gap? To beginwith, we must publicly recognize it as a problem.Too often, both women and men dismiss the paygap as simply a matter of different choices. Buteven women who make the same educationaland occupational choices that men make do nottypically end up with the same earnings.AAUW3

Although women cannot avoid the pay gap completely,they can make choices that enhance theirearning potential. A critical first step is payingattention to the salaries associated with collegemajors and occupations and understanding thelong-term financial implications of those decisions.Women can also seek out union jobs andnegotiate salary offers to improve their earnings.Taken together, these individual choices can helpclose the pay gap.A problem as long-standing and widespread asthe pay gap, however, cannot be solved by theactions of individual women alone. Employersand the government have important roles to play.Federal equal pay laws have laid the groundwork,but new legislation is needed to modernize andstrengthen these laws. Guided by better publicpolicies, employers can invest in fairer and moretransparent pay systems and be confident thattheir competitors are taking similar steps.The pay gap has been part of the workplace forso long that it has become simply normal. Yetthe pay gap has serious ramifications for womenand their families throughout their lifetimes.Graduating to a Pay Gap sheds light on the rootsof the gender pay gap among recent collegegraduates and provides recommendations forwhat we can do about it.4 Graduating to a Pay Gap

Chapter 1Why the Pay Gap MattersWomen earn considerably less money thanmen do. Although the earnings of men andwomen are more similar today than they werein 1963 when the Equal Pay Act was signed, asizeable gender pay gap remains, and in recentyears, progress in narrowing the gap has stalled(AAUW, 2012; DeNavas-Walt et al., 2012). Inthis report, we explore the reasons behind thepay gap among a group of similarly situated menand women at the beginning of their careers.Using the latest nationally representative dataavailable, we examine the gender pay gap amongcollege-educated, full-time workers just one yearafter graduation.The pay gap has far-reaching consequences forwomen and their families. According to one estimate,college-educated women working full timeearn more than a half million dollars less thantheir male peers do over the course of a lifetime(Carnevale, Rose, & Cheah, 2011). Having lessmoney means that women have more limitedchoices. The pay gap influences the neighborhoodsin which women live, the educationalopportunities they offer their children, and thefood they put on their tables. The pay gap canhave especially dire consequences for singlemothers, since they are often the only breadwinnersfor their families.Because married couples tend to prioritize thecareer of the higher-earning spouse, the pay gapnegatively affects married women’s careers inother ways. Women are more likely than mento relocate for their spouses’ jobs (McKinnish,2008), and they are more likely to leave the workforceor reduce their work hours after becomingparents (AAUW Educational Foundation, 2007).With each of these decisions, the gap betweenmen’s and women’s current and future earningswidens. In the long run, the pay gap contributesto a higher poverty rate among elderly women,with 11 percent of elderly women compared with6 percent of elderly men living in poverty in 2011(DeNavas-Walt et al., 2012). Overall, the pay gapmakes achieving economic security more difficultfor women and their families.AAUW5

Do women’s choices explain the pay gap?Few dispute the existence of the pay gap, butsome argue that it is simply the result of men andwomen making different choices. Many studieshave explored this question, including AAUW’sreport Behind the Pay Gap (AAUW EducationalFoundation, 2007). Behind the Pay Gap foundthat part of the pay gap is indeed explained bydifferences in the jobs men and women hold, thehours they work, and their education and training,factors that are influenced—although notsolely determined—by individual choices. Thereport also found that a portion of the genderpay gap is not explained by any of the factorsknown to affect earnings. Likewise, other studiesof the pay differences between men and womenhave been unable to fully explain the pay gap(Lo Sasso et al., 2011; Broyles, 2009; Black et al.,2008; Blau & Kahn, 2007, 2006; Bobbitt-Zeher,2007).For example, a recent analysis found that specialtyaccounted for much of the overall genderdifference in the salaries of physician researchers.Women were far less likely to work in higherpayingspecialties than men were. But womenstill earned an unexplained $13,399 less thantheir male colleagues did each year, even afterthe authors considered and controlled for factorsthat had a significant effect on salary, includingspecialty, age, parental status, additional graduatedegrees, academic rank, institution type,grant funding, publications, work hours, andtime spent in research (Jagsi et al., 2012). Similarly,a recent analysis of pay differences betweenmale and female full-time managers found thatfemale managers were younger and had lesseducation than male managers did. But evenafter researchers controlled for age, education,hours worked beyond full time, industry sector,marital status, and presence of children in thehousehold, female managers still earned just81 percent of what male managers did, leavingan unexplained 19 percent pay gap (U.S. GovernmentAccountability Office, 2010).In discussions of the pay gap on television, innewspapers and magazines, and online, there isoften an underlying assumption that the onlytroubling part of the pay gap is the part that isunexplained. Yet explaining or accounting fora portion of the pay gap simply means that weunderstand how various factors affect earnings,not that the resulting salary disparities are fair ordesirable. For example, women are more likelyto become teachers, a relatively low-paying jobfor a college graduate, while men are more likelyto enter higher-paying fields such as engineering.Although different job types “explain” part ofthe pay gap, cultural and other external factorsinfluence the occupations in which menand women work. The AAUW report Why SoFew? Women in Science, Technology, Engineering,and Mathematics (2010) chronicles some of thecultural norms and pressures that drive choicesabout college major and the type of job pursuedafter graduation. Both the explained and theunexplained portions contribute to the pay gap,and each points to its own set of solutions fornarrowing that gap.Discrimination persists in the workplace.Gender discrimination, overt and subtle, persistsin American workplaces. It occurs when employersand co-workers treat women in a particularway because they are women rather than onthe basis of individual merit. In 2011 alone, thefederal Equal Employment Opportunity Commission(EEOC) received more than 28,000complaints of sex discrimination, an increaseof about 18 percent compared with a decadeearlier. Although the EEOC will not find all of6 Graduating to a Pay Gap

these cases to have merit, each year millions ofdollars are awarded to individuals who file sexdiscrimination claims. Monetary awards forcases resolved through the EEOC in 2011—notincluding monetary benefits obtained throughlitigation—totaled just over $145 million (EqualEmployment Opportunity Commission, 2012).Additional money is awarded each year incases that are resolved through the courts. Inone notable case in 2010, a federal jury foundNovartis Pharmaceuticals Corporation liablefor gender discrimination in pay, promotion,and pregnancy-related matters. Twelve formerNovartis sales representatives were awarded$3.36 million in compensatory damages, and5,600 female Novartis sales representatives wereawarded an additional $250 million in punitivedamages (Velez v. Novartis Pharmaceuticals). It islikely that many more women who face similarcircumstances do not bring charges against theiremployers. The millions of dollars awarded eachyear as a result of gender discrimination claimsdemonstrate that gender discrimination in theworkplace continues to be a significant problem.Gender discrimination probably accounts forat least part of the unexplained portion of thepay gap. A strong body of experimental researchshows that most men and women continueto hold biases—often unconscious—againstwomen in the workplace, especially against thosewho work in traditionally male fields (AAUW,2010; Jost et al., 2009; Heilman et al., 2004;Eagly & Karau, 2002). In a recent experiment,science faculty members from research-intensiveuniversities selected a higher starting salary formale applicants than they did for identicallyqualified female applicants for a laboratory managerposition. Female and male faculty memberswere equally likely to exhibit bias against femaleapplicants (Moss-Racusin et al., 2012). Since discriminationis difficult to measure directly—andother factors may be at play—we do not knowhow much of the unexplained pay gap is due todiscrimination. But because gender discriminationis so common, it is probably responsible forat least part of it.Gender discrimination may also play a role in theexplained portion of the pay gap. For example,an employer who assumes that women preferpositions traditionally held by women may notconsider them for higher-paying, traditionallymale jobs. An individual’s occupation falls intothe explained portion of the pay gap, but ifemployers hire women only for “women’s jobs”and men only for “men’s jobs,” this portionof the pay gap is explained, in part, by genderdiscrimination. To the extent that women earnless than men earn because of discrimination, wehave a societal ill in need of a remedy.Why focus on recent college graduates?This report examines the pay gap betweenmen and women working full time in 2009, justone year after college graduation in 2007–08.We limited our analysis to full-time workers tomake a valid comparison of earnings. Becauseof the poor labor market in 2009, both men andwomen were less likely to be working in a fulltimejob one year after graduation (60 percent ofmale graduates and 53 percent of female graduates)compared with 2001 (74 percent of malegraduates and 67 percent of female graduates),the last time these data were gathered (AAUWEducational Foundation, 2007). Still, the majorityof 2007–08 college graduates were workingfull time one year after graduation. This analysisdoes not include recent graduates who wereunemployed or working part time in 2009. Likewise,it does not address how graduate or profes-AAUW7

sional degrees affect earnings or differences inearnings among college graduates further alongin their careers. We focus solely on earningsdifferences among women and men working fulltime one year after earning their first bachelor’sdegree.Analyzing the gender pay gap among collegegraduates at the beginning of their careers providesvaluable insight. Most are young (23 yearsold, on average), are relatively inexperienced inthe workplace, have never been married, and arenot raising children. The broad similarities in thelives of men and women at this time set the stagefor a solid comparison.This focus on recent college graduates is alsoimportant because college graduates are anincreasing proportion of the labor force, and thisis especially true for women. In the civilian laborforce in 1970, only 11 percent of women ages25 to 64 had attended college for at least fouryears; in 2010, 36 percent of women in the sameage group were college graduates. In fact, today,working women between the ages of 25 and 64are more likely than their male counterparts tohave a college degree (36 percent of women comparedwith 33 percent of men) (U.S. Departmentof Labor, 2011b, table 9). By looking at earningsdifferences between men and women workingfull time one year after graduating from college,this report examines the pay gap in an increasinglylarge segment of the workforce at a timewhen gender differences in work experience andfamily responsibilities are relatively small.This report uses descriptive statistics andregression analysis to describe pay differencesbetween women and men one year after collegegraduation. All gender differences reported inthe text and shown in the figures are statisticallysignificant (p < 0.05, two-tailed t-test) unlessotherwise indicated. Statistics in this reportwere calculated using data from the 2008–09Baccalaureate and Beyond Longitudinal Studyconducted by the National Center for EducationStatistics (NCES) at the U.S. Departmentof Education, unless otherwise noted. Thismost recent Baccalaureate and Beyond cohort waschosen from 2007–08 bachelor’s degree earnersand interviewed in 2009. NCES interviewed,mostly by telephone or online, approximately15,000 individuals. This nationally representativesample represents all individuals who earnedtheir first bachelor’s degree between July 1, 2007,and June 30, 2008, by age 35 or younger at institutionseligible for federal financial aid (TitleIV-eligible institutions) in the United States andPuerto Rico. Wherever earnings are reported,the analysis is restricted to full-time workers,with the exception of the regression analysis. Inthe regression analysis—presented in figures 10and 13—full-time workers and multiple-job holderswere included, and hours worked were heldconstant.The remainder of Graduating to a Pay Gap focuseson how factors such as college major, occupation,and hours worked affect earnings and thepay gap among recent college graduates andprovides an estimate of the unexplained portionof the gender pay gap. We also examineone immediate effect of the pay gap for manywomen—high student loan debt burden—andsuggest ways to address that burden, along withsteps that individuals, the government, andemployers can take to eliminate the pay gap. Fora detailed description of our methodology, seethe appendix.8 Graduating to a Pay Gap

Chapter 2The Pay Gap, One Yearafter College GraduationOne year after college graduation, men andwomen have much in common. In 2009, mostwomen and men who had earned bachelor’sdegrees the year before were young, single, childless,relatively inexperienced in the workplace,and working full time. We might expect to findlittle or no gender pay gap among this groupof workers at the start of their careers. Yet justone year after college graduation, with theirnewly printed degrees in hand, men already earnmore than women do. Women working full timeearned $35,296 on average, while men workingfull time earned $42,918 (see figure 1). Thesefigures represent a female/male earnings ratio of82 percent, which is slightly higher than it wasin 2001 when, among the same group, womenearned just 80 percent of what their male peersearned (AAUW Educational Foundation, 2007).Why does a pay gap already exist between theearnings of men and women who have just graduatedfrom college? In this chapter, we look atthe effect on earnings of gender differences infactors such as college major, occupation, hoursat work, economic sector, and the presence ofFIGURE 1. Average Annual Earnings One Yearafter College Graduation, by Gender$50,000$40,000$30,000$20,000$10,0000$35,29682%$42,918WomenNote: This chart shows average earnings among 2007–08 bachelor’s degree recipients employedfull time in 2009 and excludes graduates older than age 35 at bachelor’s degree completion.Source: Authors’ analysis of U.S. Department of Education, National Center for EducationStatistics, 2008–09 Baccalaureate and Beyond Longitudinal Study data.Menxx%= Women’searnings as apercentage of men’searningschildren. Using regression analysis, we thenexamine the earnings of women and men aftercontrolling for all of these factors taken together.AAUW9

Gender differences in education accountfor part of the pay gap.A college degree improves earnings considerably(AAUW, 2012), and this statement is evenmore true today than it was in the past (Goldin& Katz, 2008; Blau & Kahn, 2007). In 2009,among full-time workers, women with a bachelor’sdegree typically earned 161 percent of whatwomen with just a high school degree earned,up from 153 percent in 1990 (authors’ analysis oftable 391, Snyder & Dillow, 2011). For men, thistrend is the same. 1 According to one estimate,individuals with a bachelor’s degree earn, onaverage, $1 million more over the course of a lifetimethan do individuals with just a high schooldegree (Carnevale et al., 2010).But not all college degrees result in equal earnings.How does attending a selective college oruniversity affect earnings? Do good grades makea difference? And what is the effect of collegemajor? Two of these factors have little effect onthe pay gap, whereas the third turns out to makea considerable difference.Women and men graduate from similar kinds ofcolleges and universities.For the most part, women and men graduatefrom similar types of colleges and universities, 2and the colleges and universities from whichthey graduate are similarly selective. Just overhalf (52 percent) of 2007–08 college graduatesgraduated from “moderately selective” schools,and nearly half (47 percent) graduated from publicuniversities. Women were more likely thanmen to have graduated from colleges (36 percentof women compared with 29 percent of men)rather than universities. Men, on the other hand,were more likely than women to have graduatedfrom “very selective” colleges or universities (34percent compared with 30 percent) and frompublic universities (51 percent compared with 45percent). Apart from these differences, men andwomen earned their degrees from similar kindsof institutions.Earnings one year after graduation varied byinstitution type and selectivity, with graduatesof very selective, private universities typicallyhaving higher earnings. Because men and womengenerally graduated from institutions of similartype and selectivity, however, the differences inearnings based on institution type and selectivitydo little to explain the pay gap. In fact, thepay gap exists within nearly every category ofinstitution and level of selectivity. Among publicand private college graduates, women earned81 percent and 86 percent, respectively, of whatmen earned one year after graduation. Womenwho graduated from public universities earned86 percent of what their male peers earned. Thepay gap was largest among graduates of privateuniversities, where women earned just 75 percentof what men earned (see figure 2). Among graduatesof similarly selective schools, women earnedbetween 81 percent and 84 percent of what menearned. No matter which type of institution awoman graduates from or how selective it is, oneyear later, chances are good that she is earningless than the men with whom she graduated.1In 2009, median earnings for men ages 25 and older with a bachelor’s degree working full time, year-round were 158 percent of median earningsfor men with just a high school degree, up from 147 percent in 1990 (authors’ analysis of table 391, Snyder & Dillow, 2011).2A university is defined here as an institution that offers doctoral, four-year, and other degrees. A college is defined as any four-year schoolthat does not also offer doctoral degrees.10 Graduating to a Pay Gap

$50,000$40,000$30,000$37,09475%FIGURE 2. Average Annual Earnings One Year after CollegeGraduation, by Gender and Institution Sector$49,699$35,58586%$41,603$34,10081%$41,842$33,33086%$38,587WomenMenxx%= Women’searnings as apercentage of men’searnings$20,000$10,0000Private nonprofit universityPublic universityPublic collegePrivate nonprofit collegeNote: This chart shows average earnings among 2007–08 bachelor’s degree recipients employed full time in 2009 and excludes graduates older than age 35 at bachelor’s degree completion.Source: Authors’ analysis of U.S. Department of Education, National Center for Education Statistics, 2008–09 Baccalaureate and Beyond Longitudinal Study data.Women and men earn similar grades.Women as a group had a slightly higher gradepoint average (3.30 on a 4.0 scale) than didtheir male peers (3.18). In 2009, one year out ofcollege, 19 percent of women compared with15 percent of men had graduated with a gradepoint average of 3.75 or higher. For both men andwomen, earnings tend to increase with highergrades. Still, when we compare men and womenwith similar grades, men earned more thanwomen did, on average, at every level. Academicachievement does not shed any light on whywomen earn less than men do.Men and women major in different fields.Although men and women attended similartypes of colleges and universities and earnedsimilar grades, they tended to major in differentfields. Despite the dramatic increase in women’seducational achievements in recent decades,deep-rooted gender differences remain in fieldof study (Zhang, 2008; Bobbitt-Zeher, 2007;England, Allison, Li, et al., 2007; McDonald& Thornton, 2007; Charles & Grusky, 2004;Charles & Bradley, 2002). Research on doctoraldegree recipients, for example, shows that theproportion of doctoral degrees awarded toAAUW11

FIGURE 3. Gender Composition of College MajorsWomenMenNo significant genderdifference in majorcompositionHealth care fields 88% 12%Education 81% 19%Social sciences 63% 37%Other applied fields 1 61% 39%Biological and physical sciences,science technology, mathematics,and agricultural sciences 2, 3Humanities 60% 40%Business 2Computer and information sciences 19% 81%Engineering and engineering technology 18% 82%Note: This chart shows undergraduate majors among 2007–08 bachelor’s degree recipients and excludes graduates older than age 35 at bachelor’s degree completion.Source: Authors’ analysis of U.S. Department of Education, National Center for Education Statistics, 2008–09 Baccalaureate and Beyond Longitudinal Study data.1Includes architecture, communications, public administration and human services, design and applied arts, law and legal studies, library sciences, and theology and religious vocations.2Women and men each make up about half of graduates who majored in these fields. Percentages are not significantly different for men and women (p < 0.05, two-tailed t-test).3Although these majors are gender balanced as a group, the representation of women varies substantially among the majors included in this category. Women are more likely than men to major in thebiological sciences, and men are more likely to major in the physical sciences, agricultural sciences, and mathematics (National Science Foundation, 2011, table 5-1).women has increased dramatically (from 14 percentto 46 percent between 1971 and 2002), butthere has been little change in the fields in whichmen and women study (England & Li, 2006).Because field of study is viewed as a free choice,many people do not consider the segregation ofmen and women into different college majors tobe an issue of equal opportunity. Yet subtle andovert pressures can drive women and men awayfrom college majors that are nontraditional fortheir gender. The segregation of men and womeninto different college majors is a long-standingphenomenon that persists today.Among 2007–08 college graduates, young menand women typically chose different collegemajors. Women made up the large majority ofgraduates in health care fields (88 percent) andeducation (81 percent). At the same time, womenwere a distinct minority in engineering andengineering technology (18 percent) and computerand information sciences (19 percent; seefigure 3). Other majors, like business, are moregender balanced, but most major categories tilteither male or female. Looked at another way,about 11 percent of women majored in educationcompared with only 4 percent of men (seefigure 4). Women were also more likely than mento major in the social sciences and health carefields. Business was the most popular major forboth men and women, but it was more popularfor men (27 percent of men and 19 percent ofwomen majored in business). Men were alsomore likely than women to major in three areas:12 Graduating to a Pay Gap

FIGURE 4. College Major Choice, by Gender1%Women19%18%16% 13% 2 11% 10% 7% 3% 2 2%Men27%14%14% 12% 2 4% 2% 9% 2% 2 12% 5%BusinessSocial sciencesOther applied fields 1Humanities 2EducationHealth care fieldsBiological and physical sciences,science technology, mathematics,and agricultural sciencesGeneral studies and other 2, 3Engineering andengineering technologyComputer andinformation sciencesxx%= Percentage ofdegrees awardedwithin genderNotes: This chart shows undergraduate majors of 2007–08 bachelor’s degree recipients and excludes graduates older than age 35 at bachelor’s degree completion. Percentages may not add up to 100because of rounding.Source: Authors’ analysis of U.S. Department of Education, National Center for Education Statistics, 2008–09 Baccalaureate and Beyond Longitudinal Study data.1Includes architecture, communications, public administration and human services, design and applied arts, law and legal studies, library sciences, and theology and religious vocations.2Percentages are not significantly different for men and women (p < 0.05, two-tailed t-test).3Includes general studies, community and citizenship studies, liberal studies, humanistic studies, multi- and interdisciplinary studies, developmental and remedial education, and others.science and math, engineering, and computerand information sciences. Women have madegreat inroads into higher levels of education, butthey have done so largely without desegregatingthe various fields of study.Different college majors lead to different earnings.When we look at women’s and men’searnings by undergraduate major, clear patternsemerge. Graduates who earned degrees infemale-dominated majors tend to get jobs thatpay less than the jobs held by graduates whoearned degrees in male-dominated majors. Forexample, one year after graduation, the averagefull-time-employed female social science majorearned just 66 percent of what the average fulltime-employedfemale engineering or engineeringtechnology major earned ($31,924 comparedwith $48,493). Men who majored in a socialscience field, likewise, earned just 70 percent ofwhat men who majored in engineering or engineeringtechnology earned ($38,634 comparedwith $55,142; see figure 5).Perhaps not surprisingly, many of the majorsthat offer higher earnings one year after collegeare the same majors that provide higher earningsthroughout the course of a career. A recentanalysis conducted by Georgetown University’sCenter on Education and the Workforce (Carnevale,Strohl, & Melton, 2011) determinedmedian salaries for college graduates at all levelsof their careers, combining salaries of workersfrom ages 25 to 64 to arrive at one median salaryfor a specific major. This analysis providesa sense of the comparative earnings of majorsover the span of a lifetime career. Researchersfound that individuals who majored in science,AAUW13

FIGURE 5. Average Annual Earnings One Year after College Graduation,by Undergraduate Major and Gender$60,000$50,000$48,493$55,14288%$45,582$51,296$45,143WomenMenNo significant genderdifference in earningsxx%= Women’searnings as apercentage of men’searnings$40,000$30,000$39,61877%$38,03484%$34,989$33,180$31,924$38,634$31,38283% 87%$36,208$31,015$20,000$10,0000Engineering andengineering technologyHealth care fieldsComputer andinformation sciencesBusinessBiological andphysical sciences,science technology,mathematics, andagricultural sciencesEducationSocial sciencesOtherapplied fields*HumanitiesNotes: This chart shows average earnings among 2007–08 bachelor’s degree recipients employed full time in 2009 and excludes graduates older than age 35 at bachelor’s degree completion. In majors withred and green columns shown, men earned significantly more than women earned. In majors with one blue column shown, there were no significant gender differences in earnings one year after graduation.Source: Authors’ analysis of U.S. Department of Education, National Center for Education Statistics, 2008–09 Baccalaureate and Beyond Longitudinal Study data.*Includes architecture, communications, public administration and human services, design and applied arts, law and legal studies, library sciences, and theology and religious vocations.engineering, and business tended to be better offfinancially, on average, throughout their careersthan those who majored in the liberal arts andhumanities, education, and social work. Thepay differences associated with different collegemajors are not trivial. For example, the highestearningmajor in the Georgetown study (petroleumengineering, with median annual earningsof $120,000) earned four times as much as thelowest-earning major (counseling psychology,with median annual earnings of $29,000).Yet choice of major explains only part of thepay gap. As figure 5 shows, even when men andwomen choose the same major, women stilloften earn less than men do one year after collegegraduation. Among business majors, womenearned just over $38,000, while men earned justover $45,000. Although earnings for men andwomen were similar in some majors, such ashealth care fields and education, in others likeengineering and engineering technology, computerand information sciences, and the socialsciences, women earned between 77 percent and88 percent of what men earned.Educational factors—primarily gender differencesin college major and, to a lesser extent,differences in college type and selectivity—helpexplain a portion of the pay gap. For the mostpart, men and women graduate from similartypes of colleges and universities. When we comparethe earnings of men and women who graduatedfrom the same kinds of institutions, women14 Graduating to a Pay Gap

FIGURE 6. Employment Status One Year after College Graduation, by GenderWomen53% 16% 15% 8% 8%*Men60% 12% 12% 10% 7%*Full time, one jobPart time, one jobMultiple jobsUnemployedOut of labor force*Notes: Excludes graduates older than age 35 at bachelor’s degree completion. Percentages may not add up to 100 for each gender because of rounding.Source: Authors’ analysis of U.S. Department of Education, National Center for Education Statistics, 2008–09 Baccalaureate and Beyond Longitudinal Study data.* Percentages are not significantly different for men and women (p < 0.05, two-tailed t-test).typically earn less than the men with whom theygraduated. Women earn higher grades in college,on average, than men do, so academic achievementdoes not help us understand the pay gap.The most influential education difference is thatmen and women tend to choose different collegemajors. Traditionally “male” majors tend tolead to jobs that pay more than jobs associatedwith traditionally “female” majors. Yet when wecompare the earnings of men and women whochose the same major, women still often earn lessthan their male peers do one year out of college.Education does affect earnings, but genderdifferences in college major and other educationfactors do not fully explain the pay gap.Gender differences in employment alsoexplain part of the pay gap.Despite the poor job market in 2009, the largemajority (84 percent) of women and men whograduated in 2007–08 were employed one yearafter graduation (see figure 6). Most graduateswere working full time for one employer, andthis situation was more common for men thanfor women (60 percent of men compared with53 percent of women). Just as with education,gender differences in employment help explainpart—but not all—of the pay gap. How dooccupation, hours worked, and economic sectoraffect the earnings of full-time workers, and howdo women’s earnings compare with men’s earningswhen we control for each of these factors?Women and men tend to work in differentoccupations.One year after graduation, women and men tendto work in different types of jobs (see figure 7).Women are more likely than men to work inbusiness support and administrative assistanceoccupations and as teachers, social servicesprofessionals, and nurses and other health careproviders. Men are more likely than women towork in business and management occupations;AAUW15

FIGURE 7. Occupation One Year after College Graduation, by Gender1% 1Women20% 18% 15% 8% 1 7% 1 7% 7% 7% 5% 3% 2%Men28% 10% 5% 9% 1 8% 1 15%2%10%10%1%1%1% 1Business/managementBusiness support/administrative assistancePK–12 educatorsSales occupations 1Other white-collar occupations 1, 2 Other health care occupations 3Other occupations 2Math, computer, andphysical science occupationsNursesSocial services professionalsEngineersLife science occupations 1xx%= Percentage of maleor female graduateswithin a specificoccupationNote: This chart shows occupations among 2007–08 bachelor’s degree recipients employed full time in 2009 and excludes graduates older than age 35 at bachelor’s degree completion.Source: Authors’ analysis of U.S. Department of Education, National Center for Education Statistics, 2008–09 Baccalaureate and Beyond Longitudinal Study data.1Percentages are not significantly different for men and women (p < 0.05, two-tailed t-test).2See footnotes in appendix, figure 13, for lists of occupations included in the “other white-collar occupations” and “other occupations” categories.3Includes health care practitioners and technical occupations (except registered nurses, emergency medical technicians/paramedics, and licensed practical/vocational nurses), and health care supportoccupations.math, computer, and physical science occupations;engineering; and “other,” mainly bluecollar,occupations.Since men and women tend to major in differentfields, it may not seem surprising that they oftenend up in different occupations. But occupationalsegregation is a stubborn and persistentphenomenon that occurs even among studentswho graduate with degrees in the same fields.Among social science graduates, for example,men were more likely to work in business ormanagement occupations (26 percent of mencompared with 11 percent of women), whilewomen were more likely to work as social servicesprofessionals (16 percent of women butonly 6 percent of men), in health care occupations(7 percent of women compared with 1 percentof men), and as PK–12 educators (7 percentof women compared with 2 percent of men).Among engineering and engineering technologymajors, 57 percent of men were working asengineers compared with 39 percent of women.In contrast, 20 percent of women who graduatedwith an engineering or engineering technologydegree were working in a white-collar occupationother than engineering, science, or business,compared with 4 percent of men. Other researchhas found that female science and businessmajors are twice as likely as their male counterpartsto enter clerical work. Men in these majorsare more likely to go into management jobs (Joy,2000, 2006).Gender differences in occupation translate intodifferent earnings for men and women. Not onlydo men and women tend to work in differentoccupations, men tend to work in higher-paying16 Graduating to a Pay Gap

$25,998$38,138FIGURE 8. Average Annual Earnings One Year after College Graduation, by Occupation and Gender$60,000$50,000$40,000$30,000$20,00093%$48,12083%$36,09279%89%$33,434$37,57978%$29,06969%54%$30,829 $31,033$32,48877%WomenMenNo significant gender differencein earningsxx% Percentage of women in occupationxx%= Women’s earnings as a percentage of men’s earnings$42,24453%$30,41387%51%$34,889$41,64886%$48,44746%68%36%$48,485$55,04624%$10,00015%0Nurses 1Other health careoccupations 2PK–12 educatorsSocial servicesprofessionalsBusiness support/administrative assistanceLife science professionalsSales occupationsOther white-collaroccupations 3Business/managementOther occupations 3Math, computer, andphysical science occupationsEngineersNotes: This chart shows average earnings among 2007–08 bachelor’s degree recipients employed full time in 2009 and excludes graduates older than age 35 at bachelor’s degree completion. In occupationswith red and green columns shown, men earned significantly more than women. In occupations with one blue column shown, there were no significant gender differences in earnings one year aftergraduation.Source: Authors’ analysis of U.S. Department of Education, National Center for Education Statistics, 2008–09 Baccalaureate and Beyond Longitudinal Study data.1The number of male nurses was too small to meet the reporting standards, so we were unable to test for significant gender differences in earnings among nurses.2Includes health care practitioners and technical occupations (except registered nurses, emergency medical technicians/paramedics, and licensed practical/vocational nurses), and health care supportoccupations.3See footnotes in appendix, figure 13, for lists of occupations included in the “other white-collar occupations” and “other occupations” categories.“male” jobs, and women tend to work in lowerpaying“female” jobs (Hegewisch et al., 2010; seefigure 8). 3 For example, although salaries are highin engineering, women made up just 15 percentof recent college graduates working in that fieldin 2009. In the not-so-distant past, employersexplicitly assigned “female” jobs lower wagesthan “male” jobs simply because women heldthem. Inertia in wages and gender ratios withinoccupations contributes to the persistence oflower wages in “female” jobs (England, Allison, &Wu, 2007; Kim, 1999).Occupational segregation contributes to thegender pay gap but cannot explain it completely.According to the U.S. Department of Labor(2011a), men earn more than women do in thevast majority of occupations. Our analysis findsthat in many occupational categories, womenalready earn less than men do just one year out3Nursing is a clear exception, with relatively high wages as well as high female representation one year after college graduation. Otherresearch has indicated that wage growth in some nursing fields is low (Lovell, 2006). Some types of nursing, however, provide relatively highwages throughout a career.AAUW17

of college. In some fields, the earnings of menand women were similar, but in no occupationalcategory did women earn significantly morethan men. Among business support workersand administrative assistants, for example, menDo Women Prefer Lower-Paying Jobs?In a court case against the grocery chain Lucky Stores,both sides agreed that female store employees earned,on average, between 76 percent and 82 percent of whatmale employees earned due to sex segregation in jobs.The plaintiffs argued that the differences were the resultof discrimination, while the employer argued that thedifferences resulted from women’s and men’s choices.The plaintiffs said that women were regularly placed injobs that paid less than jobs given to male co-workers,even though there was no significant difference betweentheir education and experience. Lucky Stores said itassigned women and men to different jobs becausethat’s what the employees preferred. For example, onemanager testified that women were more interested incash register work, and men were more interested infloor work.Ultimately, the judge ruled that “sex discrimination wasthe standard operating procedure at Lucky with respectto placement, promotion, movement to full-time positions,and the allocation of additional hours” (Stenderv. Lucky Stores, 803 F. Supp. 259, N.D. Cal. 1992). Thecase illustrates how discrimination can play a role in theexplained portion of the pay gap when employers mistakenlyassume that female employees prefer lower-paidpositions traditionally held by women and—intentionallyor not—place men and women into different jobs,ensuring higher pay for men and lower pay for women.Occupational segregation is likely affected by both individualchoices and discrimination (Blau & Kahn, 2007).and women had similar earnings. Among teachers,however, women earned 89 percent of whatmen earned. Likewise, in business and managementoccupations, women earned 86 percent ofwhat men did. The two occupational categorieswith the largest pay gaps were sales occupations,in which women earned just 77 percentof what their male peers earned, and “otheroccupations,” a category that includes mainlyblue-collar jobs, such as food service, farming,and construction occupations, in which womenearned just 68 percent of what men did.Among full-time workers, men report workingmore hours than women do.Although full-time work is typically consideredto be 40 hours per week, full-time workersreported working considerably different numbersof hours. Some full-time workers reportedworking as few as 35 hours a week, and othersreported that they worked more than 50 hoursa week. One year out of college, women infull-time jobs reported working an average of43 hours per week; men reported working anaverage of 45 hours per week. Half of full-timeemployedmen reported working more than 40hours per week compared with one-third of fulltime-employedwomen. Yet when we comparethe earnings of men and women who reportedworking the same number of hours, men stillearned more than women did (see figure 9).Among workers who reported working 40 hoursper week, women earned 84 percent of what menearned. Similarly, among those who reportedworking 45 hours per week and those whoreported working 50 hours per week, womenearned just 82 percent of what men earned. Genderdifferences in hours worked explains part,but not all, of the gender pay gap.18 Graduating to a Pay Gap

FIGURE 9. Average Annual Earnings One Yearafter College Graduation, by Hours Workedand Gender$50,000$40,000$30,000$20,000$10,0000$34,10984%40 hours$40,474$37,61782%45 hours$46,127Hours worked per weekWomen$39,83950 hours$48,445Note: This table shows average earnings among 2007–08 bachelor’s degree recipients employedfull time in 2009 and excludes graduates older than age 35 at bachelor’s degree completion.Source: Authors’ analysis of U.S. Department of Education, National Center for EducationStatistics, 2008–09 Baccalaureate and Beyond Longitudinal Study data.Men82%xx%= Women’s earnings as apercentage of men’s earningsWomen and men work in different economicsectors.Women and men tend to work in somewhatdifferent parts of the economy. In 2009, amongfull-time workers one year after college graduation,the majority of both men and womenworked in the for-profit sector. Men were morelikely than women (70 percent compared with52 percent) to work in this sector. Women, onthe other hand, were more likely than men towork in the nonprofit sector (19 percent comparedwith 7 percent). Compared with their malepeers, women were also more likely to work forthe government (18 percent compared with13 percent), and less likely to be in the military(1 percent compared with 3 percent).Earnings varied by sector, as did pay gaps. Earningswere highest overall in the military andfor-profit sectors. Earnings were highest forwomen in the military, where only 1 percent ofwomen worked. Men’s earnings were high in themilitary as well. As a result, there was no pay gapin the military (average earnings were $44,325).Men earned significantly more than womenearned in the for-profit and government sectors,where more than three-quarters of recentcollege graduates who were working full timewere employed. Among full-time workers in thefor-profit sector, women earned just 80 percentof what their male counterparts earned ($35,841compared with $44,638); among governmentworkers, women earned 86 percent of what theirmale colleagues earned ($34,848 compared with$40,613). 4 In the nonprofit sector, as in the military,there was no significant pay gap betweenmen and women one year after graduation (averageearnings were $35,015).Gender differences in occupation, hours worked,and employment sector help explain a portion ofthe pay gap. One year after graduation, womentypically were working in lower-paying “women’sjobs,” and men were typically working in higherpaying“men’s jobs.” Men reported workinglonger hours than women did and were morelikely to work in the higher-paying for-profit andmilitary sectors. Yet when we control for eachof these factors, we find that men still tendedto earn more than their female peers earned. Inmany occupational categories, women earnedless than their male peers did one year after collegegraduation. When men and women workedthe same number of hours, men earned morethan women did. When men and women workedin the same economic sector, men typically4These findings are consistent with other research showing that the pay gap between men and women is wider in the private sector than inthe public sector (Miller, 2009; U.S. Government Accountability Office, 2009).AAUW19

earned more than women earned. Employmentaffects earnings, but gender differences in occupation,hours worked, and other employmentfactors do not fully explain the pay gap.Demographics and personal characteristicsdo little to explain the pay gap.A number of demographic factors and personalcharacteristics are relevant to earnings but dolittle to help explain the pay gap between menand women. These include race and ethnicity,geographical location, age, and marital status.Differences in parenting responsibilitiesbetween mothers and fathers are often citedas a major factor behind the pay gap. Indeed,becoming a mother can negatively affect women’searnings, while becoming a father does nottypically have the same effect (Correll et al.,2007). Women are more likely than men to leavethe workforce or reduce their work hours afterthey have children, thus reducing their earnings(AAUW Educational Foundation, 2007).Research has found that even among full-timeworkers, mothers face an earnings penalty inthe workforce compared with women withoutchildren (Correll et al., 2007).In this analysis, we examined the pay gapbetween men and women at a time in life beforemost respondents had children. Among thosewho did have children, though, both men andwomen earned more than their counterpartswithout children. Mothers tended to be olderthan other female graduates, which may accountin part for their relatively higher levels of pay.Not surprisingly, among full-time workers justone year after college graduation, the pay gapcannot be explained by motherhood.FIGURE 10. The Pay Gap One Year afterCollege Graduation, with and withoutExplanatory VariablesWomen’s average earnings as a percentageof men’s average earnings10080604020082%Pay gap overallamong collegegraduates93%Pay gap amongcollege graduatesafter controllingfor factors foundto affect earningsNotes: The chart shows the pay gap among 2007–08 bachelor’s degree recipients in 2009. Thecolumn on the left shows the pay gap among all bachelor’s degree recipients working full-time oneyear after college graduation. The column on the right shows the pay gap among bachelor’s degreerecipients working full time or in multiple jobs after controlling for factors found to affect earnings.Factors controlled for include occupation, economic sector, hours worked per week, multiple jobs,months unemployed since graduation, undergraduate GPA, undergraduate major, undergraduateinstitution sector, institution selectivity, age, region of residence, and marital status. This analysisexcludes graduates older than age 35 at bachelor’s degree completion.Source: Authors’ analysis of U.S. Department of Education, National Center for EducationStatistics, 2008–09 Baccalaureate and Beyond Longitudinal Study data.One-third of the pay gap is unexplained.Although education and employment factorsexplain a substantial part of the pay gap, they donot explain it in its entirety. Regression analysisallows us to analyze the effect of multiple factorson earnings at the same time. One might expectthat when you compare men and women withthe same major, who attended the same type ofinstitution and worked the same hours in thesame job in the same economic sector, the paygap would disappear. But this is not what ouranalysis shows. Our regression analysis findsthat just over one-third of the pay gap cannotbe explained by any of these factors and appears20 Graduating to a Pay Gap

to be attributable to gender alone. That is, afterwe controlled for all the factors included in ouranalysis that we found to affect earnings, collegeeducatedwomen working full time earned anunexplained 7 percent less than their male peersdid one year out of college (see figure 10; see alsofigure 13 in the appendix).One year out of college, the pay gap isalready established.Women and men who earned bachelor’s degreesin 2007–08 attended similar kinds of colleges.On average, women earned slightly higher grades.Most women and men entered full-time employmentafter graduation. Yet one year later, womenworking full time earned only 82 percent of whattheir male colleagues earned. Gender segregationin undergraduate majors and the subsequentsegregation of the workforce partly explain thepay gap, but a pay gap also exists within fields ofstudy and occupations. Indeed, after accountingfor factors known to affect wages, about onethirdof the gap remains unexplained. In 2009,among full-time workers one year after collegegraduation, women earned an unexplained7 percent less than men did.AAUW21

Chapter 3High Student Loan Debt BurdenFor many female college graduates, an immediateoutcome of the pay gap is high student loandebt burden. “Student loan debt burden” isdefined as the percentage of earnings devoted tostudent loan payments. 5 A high student loan debtburden is an indicator that repayment may createhardship. Graduates with a high student loandebt burden are less likely to buy a home, get acar loan, or even make rent payments (Choy &Li, 2005). Most research indicates that a collegedegree pays for itself over time. But as collegecosts rise and more students borrow moremoney to finance their education, a surprisinglylarge and growing percentage of students—especiallywomen—are graduating with high levels ofstudent loan debt burden.Student loan debt affects both men and women,but it is especially onerous for many women.Among 2007–08 college graduates, womenand men typically borrowed similar amountsof money to finance their educations—about$20,000. 6 The median monthly student loanpayment for both men and women one year aftergraduation was just over $200. Repaying studentloans is likely to present a hardship for morewomen than men for two reasons. First andforemost, women earn less than men earn oneyear after graduation. Because women earn less,student loan repayments make up a larger portionof their earnings. Second, more women havestudent loan debt, in part because they are morelikely to go to college than men are. In 2007–08,women earned 57 percent of the bachelor’sdegrees awarded. Women are also more likelythan men to borrow money for school: Among2007–08 college graduates, 68 percent of womenborrowed money for college compared with5The shorter term “debt burden” has also been used to describe student loan payment as a percentage of earnings (see American Council onEducation, 2004). Here, we use “student loan debt burden” to emphasize that the debt burden to which we refer is only the debt burdenrelated to loans from public and private sources (excluding family and friends) to pay for undergraduate education. Many recent graduatescarry other types of debt. Student loan debt is only a part of the debt picture for many graduates.6We present the median amount borrowed because it indicates the amount a typical student borrows. Half of borrowers borrowed more than$20,000, and half borrowed less. The mean, or average, amount borrowed is also a useful measure. The mean is influenced by those who borrowvery high amounts; therefore, it may give an inflated sense of the amount students typically borrow. In terms of averages, college studentsborrowed around $24,000 to pay for college, and women borrowed slightly more than men did.AAUW23

63 percent of men. Because of these factors, highstudent loan debt burden is a particularly widespreadproblem among women.Higher percentages of recent college graduates—especiallywomen—were paying a sizeableportion of their earnings toward student loandebt in 2009 than in 2001. Among full-timeworkers who were repaying their loans in 2009,nearly half (47 percent) of women one year aftercollege graduation were paying more than 8 percentof their earnings toward student loan debt,compared with 38 percent in 2001. Among men,39 percent were devoting more than 8 percent oftheir earnings toward student loan debt in 2009,compared with 31 percent in 2001. Among thosewith very high student loan debt burden, weagain see a gender difference. In 2009, one yearout of college, 20 percent of women working fulltime and repaying their loans were paying morethan 15 percent of their earnings toward studentloan debt, compared with 15 percent of men (seefigure 11).How much student loan debt is too much? Formany years, analyses of student debt considereda student loan debt burden of 8 percentor less (i.e., paying 8 percent or less of one’searnings toward student loan debt) manageableand anything more than 8 percent unmanageable(Greiner, 1996; Scherschel, 1998; AmericanCouncil on Education, 2004). More recentanalysis suggests that there is no single percentagebeyond which student loan debt is unmanageable,as borrowers with higher earnings canafford to devote a higher proportion of theirearnings to debt repayment without sacrificingbasic expenditures (Baum & Schwartz, 2006).FIGURE 11. Student Loan Debt Burden One Yearafter College Graduation, by Year and Gender100%80%60%40%20%0%8% 1 11% 1, 2 15%23%28% 224% 169%62%61%Men WomenMen Women2001 2009Share of earnings devoted to student loan paymentsMore than 15% 9–15% 1–8%Notes: Student loan debt burden is the percentage of earnings devoted to student loan payments.This chart shows student loan debt burden among 1999–2000 and 2007–08 bachelor’s degreerecipients who were making non-zero payments on their student loans and were employed fulltime one year after graduation. This analysis excludes graduates older than age 35 at bachelor’sdegree completion. Percentages may not add up to 100 because of rounding.Source: Authors’ analysis of U.S. Department of Education, National Center for EducationStatistics, 2000–01 and 2008–09 Baccalaureate and Beyond Longitudinal Study data.1Percentages are not significantly different for men and women (p < 0.05, two-tailed t-test).2Before rounding, these numbers add up to 38 percent.20%27% 1For a typical recent graduate, however, the 8 percentguideline provides a fairly close estimateof manageable student loan debt burden. Weestimate that a typical woman working fulltime one year after college graduation in 2009could reasonably afford to devote 7.8 percentof her $33,753 annual earnings to student loanpayments. We estimate that her typical malecounterpart, who made $39,985 a year, couldreasonably afford to devote 8.9 percent of hisearnings to student loan payments. In 2001, thecomparable numbers were 9.5 percent for men53%24 Graduating to a Pay Gap

Estimating Manageable Student Loan Debt Burden for a Typical Man or WomanWhen estimating manageable student loan debt burden(MSLDB), we based our calculation on the formula theU.S. federal government uses to determine eligibilityfor federal student loan payment reductions through theIncome Based Repayment (IBR) program (U.S. Departmentof Education, Federal Student Aid, 2012). IBR currentlysets the threshold for eligibility at 15 percent of discretionaryincome, where discretionary income is income minus150 percent of the federal poverty level. IBR’s thresholdfor eligibility is soon scheduled to drop to 10 percent ofdiscretionary income. IBR considers only federal studentloans when determining eligibility for loan paymentreductions; we considered not only federal student loansbut also student loans from private sources, states, andcolleges and universities. Among 2007–08 graduates,federal loans made up about 70 percent of the total studentloan amount borrowed by a typical borrower. Because weconsider nonfederal as well as federal loans, we approximateMSLDB using 15 percent of discretionary incomerather than the 10 percent of discretionary income to whichIBR’s threshold is soon scheduled to drop.Our formula isMSLDB = Maximum Reasonable Annual Student LoanPayment (MRASLP)/Annual Earnings, where MRASLP =15% [Annual Earnings – 150% (poverty level)].We used median earnings to provide an estimate of manageablestudent loan debt burden for a “typical” man and a“typical” woman one year after college graduation.In 2009, for individuals working full time with a family sizeof one and who lived in the 48 contiguous United States orWashington, D.C., one year after college graduation,MSLDB for a typical man =15% [$39,985 – 150%($10,830)]/$39,985 = 8.9%MSLDB for a typical woman =15% [$33,753 – 150%($10,830)]/$33,753 = 7.8%In 2001, for individuals working full time with a family sizeof one and who lived in the 48 contiguous United States orWashington, D.C., one year after college graduation,MSLDB for a typical man =15% [$35,000 – 150%($8,590)]/$35,000 = 9.5%MSLDB for a typical woman =15% [$29,900 – 150%($8,590)]/$29,900 = 8.5%.For poverty guidelines by year and household size, seeU.S. Department of Health and Human Services (2012).and 8.5 percent for women. (See the sidebar fora description of the method we used to estimatemanageable student loan debt burden.)This analysis takes a conservative approach inestimating debt burden among recent studentloan borrowers. For one thing, we look only atstudent loan debt. Many recent college graduatesalso have other forms of debt, such as creditcard debt and car loans. Second, we include onlypayments on student loans obtained from thefederal government, states, colleges, universities,banks, and other private lenders. In addition tothese student loans, some recent graduates haveborrowed money for college from family andfriends, and these loans are not included. ManyAAUW25

FIGURE 12. Share of Women and Men withHigh Student Loan Debt Burden One Year afterCollege Graduation, by Year60%50%40%30%20%10%0%27%38% 39%2001 200953%WomenNotes: Student loan debt burden is the percentage of earnings devoted to student loanpayments.This chart shows the share of 1999–2000 and 2007–08 bachelor’s degree recipientsworking full time and making non-zero payments on their student loans one year after graduationwho were paying a higher proportion of their earnings toward student loan debts than a typicalindividual could reasonably afford. We estimate that, in 2009, a typical man could reasonablyafford to devote 8.9 percent of his earnings to student loan payments, and a typical woman couldreasonably afford to devote 7.8 percent of her earnings to student loan payments. In 2001, thosepercentages are estimated at 9.5 percent and 8.5 percent for men and women, respectively. Thisanalysis excludes graduates older than age 35 at bachelor’s degree completion.Source: Authors’ analysis of U.S. Department of Education, National Center for EducationStatistics, 2000–01 and 2008–09 Baccalaureate and Beyond Longitudinal Study data.parents have also borrowed money to financetheir children’s education. Our analysis does notinclude payments on any of these other debts.Finally, this analysis includes only students whocompleted their bachelor’s degrees and wereworking full time one year after graduation.Student loan debt often causes even greaterdifficulty for those who dropped out of collegeMenbefore finishing their degrees (Nguyen, 2012) orwho graduated but were either unemployed orworking part time one year after graduation.Among full-time workers repaying their loansone year after college graduation in 2009, justover half of women (53 percent) and 39 percentof men were paying a greater percentage of theirearnings toward student loan debt than what weestimate a typical woman or man could reasonablyafford to pay. By comparison, in 2001, 38percent of women and just over one in four men(27 percent) in the same group were paying agreater percentage of their earnings toward studentloan debt than was affordable for a typicalwoman or man (see figure 12). 7An increasingly large proportion of men andwomen are experiencing high student loan debtburden one year after college graduation. Thisanalysis understates the full magnitude of theoverall debt problem among recent college graduatesbecause it considers only student loan debtamong those working full time one year aftercollege graduation. Assessing the full magnitudeof the debt problem among recent college graduatesis a subject for another study. Here, we showthat even when we look only at student loan debtfacing recent college graduates fortunate enoughto be working full time, we have a significant andgrowing problem. Women are especially likelyto have high student loan debt burden, largelybecause of the pay gap.7Not all recent graduates paying a high percentage of their earnings toward student loan debt were necessarily experiencing economic hardship.Some of those with a high student loan debt burden may have been earning more money than is typical and, therefore, could more easilydevote a higher percentage of their earnings toward student loan debt. Likewise, some of those with a high student loan debt burden mayhave had other resources to lessen the actual burden of the debt. Still, the gender difference in percentages of men and women who werepaying more than was typically affordable is noteworthy. Similarly, figures 11 and 12 both illustrate that student loan payments constitute asizeable portion of more college graduates’ budgets in 2009 than in 2001.26 Graduating to a Pay Gap

Chapter 4Narrowing the Pay GapRemedies for the pay gap have been put forward,but implementation remains slow and not alwayssteady. What can employers, public policy makers,and individuals do to narrow the pay gap?Employers’ pay policies have far-reachingconsequences.Employers have a great deal of discretion in paydecisions. Recent research shows that managersmay substitute procedural fairness for actual fairpay for women, consciously or unconsciouslycreating and maintaining the pay gap (Belliveau,2012). Many supervisors make decisions abouthiring, pay, and promotion with little guidance.As long as employers do not discriminate on thebasis of characteristics such as gender, race, andage and follow the minimum wage rules, theyare free to offer as much or as little as they like.Employees rarely know if they are paid fairlybecause they do not know what their colleaguesor others in the industry earn.Make pay systems transparent.Nearly half of all workers nationally are eitherforbidden or strongly discouraged from discussingtheir pay with colleagues. Pay secrecy ismuch more common in the private sector, where61 percent of employees are either discouragedor prohibited from discussing wage and salaryinformation. Only 14 percent of public-sectoremployees are discouraged or prohibited fromdiscussing pay (Hegewisch et al., 2011).This greater transparency may be related to thegreater gender pay equity found in the publicsector, including the federal government. Arecent report found that among federal workers,women earned 89 percent of what men earned,compared with 78 percent in the workforce as awhole (U.S. Government Accountability Office,2009). Federal workers can easily see how theirsalaries compare with those of others at theirgrade level and geographic location because theU.S. Office of Personnel Management makesAAUW27

public the salary and wage range for each levelof federal worker and additional locality payfor areas where the cost of living is higher. Thisinformation is easily accessible on the Internet(www.opm.gov/oca/12tables/indexGS.asp).Increased transparency about pay can alsoincrease job satisfaction among employees.Transparency does not mean that everyone mustknow everyone else’s salary. Rather, simply bymaking salary ranges for specific job titles availableto all employees, employers provide workerswith information that puts wages in context andhelps them assess the fairness of their earnings.Employers may be hesitant to provide salaryranges for fear that many employees will ask formore money. Transparency in pay scales increasesa sense of fairness among workers, however, andevidence indicates that employees’ performanceand morale are better when they believe theiremployer is fair (Kim, 2009; Cohen-Charash &Spector, 2001; Colquitt et al., 2001).Conduct a pay equity study.In addition to increasing transparency in paysystems, employers can create fair workplacesby assessing the pay gap within their organizationsand taking steps to address any gender paydifferences they find. The state of Minnesotaprovides a good example. Public-sector employersin Minnesota are required to conduct a payequity study every few years and eliminate paydisparities between female-dominated and maledominatedjobs that require comparable levels ofexpertise. Employers use a job evaluation tool tocompare the complexity of issues encountered,the depth and breadth of knowledge needed,the nature of interpersonal contacts required,and the physical working conditions. This allowsemployers to identify jobs—for example, deliveryvan drivers and clerk typists—that, despitebeing different, require similar levels of knowledgeand responsibility. An analysis then compareswages for predominantly female jobs withthose of predominantly male jobs of comparableskill levels. If the results show that women areconsistently paid less than men are paid forjobs requiring similar levels of knowledge andresponsibility, the employer makes the necessarysalary adjustments (Minnesota Management andBudget, 2012).Good public policies are critical to payequity.The government has a role to play in both eliminatingthe pay gap and alleviating the burdenof student loan debt. As we describe in chapter3, women are more likely to experience highstudent loan debt burden, largely because of thepay gap. What can the government do to helpreduce student loan debt burden and narrow thepay gap?Address the burden of student loan debt.Protect Pell grants. One way to help slow thegrowing burden of higher education debt is toprotect and fund the federal Pell Grant Program,which provides financial assistance to studentswith demonstrated need. Since Pell grants are,as the name implies, grants and not loans, theydo not add to student loan debt and help reducethe need to borrow. Despite relatively recentincreases in the maximum grant, its currentpurchasing power is the lowest in the grant’shistory: less than one-third of what it costs toattend a public four-year college or university asan in-state student. AAUW supports increasinggrant levels and ensuring that eligibility for Pellgrants is not eroded.28 Graduating to a Pay Gap

Ensure that borrowers are well informed. Forstudents who must borrow to finance their education,Congress can take action to ensure thatthey are well informed about their borrowingoptions. It is critical that students exhaust theirfederal grant and loan options before taking onrisky private student loans. Private student loanstypically have uncapped variable rates that arehighest for those with the weakest credit histories.Even fixed-rate private loans usually sethigher rates for those who can least afford them.Private loans also lack the consumer protectionsand flexible repayment options that comewith federal student loans. Borrowers may onlyrealize the unfavorable terms that accompanyprivate loans when they enter repayment or hithard times.Although the annual volume of new private loanshas declined substantially from the 2007–08peak, students are still taking out billions ofdollars in new private loans every year. At somecolleges, private loans—despite being one ofthe riskiest ways to pay for college—accountfor a majority of their graduates’ debt (Projecton Student Debt, 2011b). About half of studentswho took out private student loans in 2007–08could have borrowed more in federal studentloans than they actually did (Project on StudentDebt, 2011a). A bill before Congress, the KnowBefore You Owe Act, would require students tobe counseled on federal aid eligibility as well asthe different terms and conditions of federal andprivate student loans before the lender issues aprivate loan. This type of disclosure is importantfor helping students make the most informeddecisions when they must borrow.Increase awareness of student loan reliefprograms. The U.S. Department of Education’sIncome-Based Repayment (IBR) program is animportant, underused tool that provides relieffor college graduates with high student loan debtburden. IBR caps federal student loan paymentsat a manageable level—as low as $0—based onan individual’s income and family size. It alsoprovides a light at the end of the tunnel forthose who are seriously overburdened by studentloan debt by forgiving any remaining debtafter 25 years of payments (or as few as 10 yearsif an individual works for a public or nonprofitemployer). AAUW encourages the Departmentof Education to increase awareness of IBR andmake the application process as user-friendlyas possible. Because women are more likely toexperience high student loan debt burden, IBRcan be especially useful to them.Treat private student loans like other privateloans. While IBR and related programs can helpkeep federal student loan payments manageablefor many borrowers, some still find themselvesoverwhelmed by their debt. Student loan debtis not discharged in bankruptcy like many othertypes of debt. Since 2005, private student loanshave been treated just as harshly in bankruptcyas federal student loans, even though privateloans are not a form of student aid. AAUWsupports passage of the Private Student LoanBankruptcy Fairness Act, which would remedypart of the problem by allowing private studentloans to be discharged in bankruptcy like similartypes of unsecured consumer debt, such as creditcards and payday loans, helping borrowers insevere financial distress.Until such proposals to strengthen protectionsfor private student loan borrowers become law,students and graduates have a new resource inthe Consumer Financial Protection Bureau’sstudent loan ombudsman, who can help borrowersnavigate their student loan repaymentAAUW29

options and file complaints. AAUW encouragesthe Consumer Financial Protection Bureau touse its full authority to protect consumers fromabuses by private student lenders, servicers, andcollection agencies.Eliminate the pay gap.Federal and state laws can help ensure fair payfor all employees. The Equal Pay Act of 1963prohibits employers from discriminating on thebasis of sex by compensating workers differentlyfor jobs that require equal skill, effort, andresponsibility. The federal Equal EmploymentOpportunity Commission (EEOC) enforcesboth the Equal Pay Act and Title VII of the CivilRights Act of 1964, which prohibits discriminationin employment on the basis of race, religion,national origin, and sex. Thousands of chargeshave been brought against employers with theselaws, resulting in millions of dollars in awardsand settlements.The Lilly Ledbetter Fair Pay Act, passed in 2009,clarifies that the 180-day statute of limitationsfor filing an equal pay lawsuit for pay discriminationresets with each new discriminatory paycheck.This measure is a narrow fix that returnedlegal practices and EEOC policies to what theywere before the U.S. Supreme Court issued itsproblematic 2007 decision in Ledbetter v. GoodyearTire & Rubber—nothing more, nothing less.Legislative measures that have been pendingin Congress for several years could improveboth enforcement of pay equity laws and publicawareness of the pay gap itself. Key amongthese measures is the Paycheck Fairness Act(S. 797/H.R. 1519), a comprehensive bill and amuch-needed update to the Equal Pay Act of1963. It would create incentives for employersto follow the law, empower women to negotiatefor equal pay, and strengthen federal outreachand enforcement efforts. Passed by the House inJanuary 2009 with a bipartisan majority, the PaycheckFairness Act was narrowly defeated on aprocedural vote in the Senate in November 2010.The bill was reintroduced in the 112th Congressand unfortunately failed in procedural votes insummer 2012, this time in both the Senate andthe House. AAUW remains vigilant in urgingCongress to support this legislation.Equal pay laws provide protection againstdiscriminatory practices by employers, butlitigation is an action of last resort and can beprohibitively expensive. In 2011, the SupremeCourt refused to allow a class-action suit againstWal-Mart, the nation’s largest private employer,to proceed, saying that the size of the group offemale employees alleging pay discriminationwas too large (Wal-Mart v. Dukes). This decisionmakes it much more difficult for women toband together to challenge companywide paydiscrimination. Without the option to participatein class-action lawsuits, many deservingplaintiffs find it financially infeasible to pursue apay discrimination lawsuit. As discussed above,employers can and should take steps to addressthe pay gap within their organizations to preventthe need for sex discrimination lawsuits in thefirst place.Individual choices make a difference.A problem as long-standing and widespread asthe pay gap cannot be solved by the actions ofindividual women alone. Women cannot chooseto avoid the pay gap, but they can make choicesthat enhance their earning potential.30 Graduating to a Pay Gap

Choose your college major carefully.An individual’s college major has lifelong financialimplications. Our analysis finds that engineering,health care fields, and computer andinformation sciences are some of the best-payingmajors for women one year after graduation.Other analysis has shown that these are someof the best-paying majors throughout a lifetimeas well (Carnevale, Strohl, & Melton, 2011).Women are already well represented in healthcare fields, but not all health care fields pay thesame. Choosing a higher-paying health caremajor like pharmaceutical sciences or nursingwill make achieving economic security easier forwomen. Similarly, choosing a major in one of thetypically “male” fields of engineering or computerscience tends to lead to higher earnings.Of course, future salary is not the only factor toconsider when choosing a major. Research showsthat young women tend to choose fields wherethey see themselves as helping others, whileyoung men tend to be driven more by financialconsiderations and personal interests (Eccles,2011; Shauman, 2006). Fortunately, the highestpayingmajors for women—engineering, healthcare fields, and computer and information sciences—alsolay the groundwork for careers thathave great potential to help people. Women (andmen) who are motivated to help others need notsacrifice their own economic security in pursuitof that worthy goal. It is possible to simultaneouslydo work that benefits society and earn agood salary. Considering the financial return ona college major along with other factors will benefitwomen and help reduce the gender pay gap.Research your intended occupation.It is equally important for young women toprioritize earnings when they choose a first job.An individual’s first salary provides the foundationon which future raises are based and earningsexpectations are formed. Our analysis showsthat occupations like nursing; engineering; andmath, computer, and physical science occupationsare the best-paying jobs for women oneyear out of college. These tend to be occupationsthat are well paying throughout a career aswell. Even though traditionally male jobs tendto pay more than traditionally female jobs do,eliminating the pay gap is not simply a matter ofencouraging women to pursue jobs in historicallymale fields, because there is a wage gap in nearlyevery field (U.S. Department of Labor, 2011a). Inaddition, some evidence shows that when fieldsattract more women, wages fall (Levanon et al.,2009; Steinberg, 2001; England, 1992). So if wetry to tackle the pay gap merely by encouragingwomen to enter traditionally male fields, wewill probably fall short of achieving our goal. Itis important for young women to research thelikely future earnings associated with differentoccupations when they decide what job to pursueafter graduation.Learn how to negotiate.Recent graduates can become their own bestadvocates by understanding what they are worthand negotiating their first post-college salary andbenefits. Many college women are not aware ofthe pay gap, how it affects their long-term financialfuture, or how critical their first salary aftercollege is to their finances over the long haul.Research has found that women have learnedbehaviors and expectations that minimize theirpay. Women tend to expect less and view theworld as having fewer negotiable opportunities(Babcock & Laschever, 2003). At the same time,some evidence indicates that employers tend topenalize women more than men for initiatingAAUW31

negotiations. Women are still expected to be“nice,” and women who negotiate for a highersalary can be perceived negatively (Bowles et al.,2007). $tart $mart salary negotiation workshops,a collaboration between AAUW and the WAGEProject, provide college women with the knowledgeand skills they need to negotiate salariesand benefits so that they receive fair compensationwhen they enter the job market.Seek out union jobs.Union membership is associated with higherearnings for women and a smaller pay gapbetween men and women. In 2011, women unionmembers who were working full time had weeklymedian earnings of $879 compared with $653among their peers who were not representedby unions (U.S. Department of Labor, 2012). Inother words, the average woman working fulltime who is represented by a union earns morethan 30 percent more than the average womanworking full time who is not represented by aunion. Women union members working full timeearned 90 percent of what their male counterpartsearned. In comparison, among full-timeworkers who were not represented by unions,women earned just 82 percent of what menearned (authors’ analysis of U.S. Department ofLabor, 2012).Although overall union membership is declining,college-educated workers make up a higher proportionof union members today than in decadespast. In 2008, nearly four out of 10 union memberswere college graduates compared with justtwo out of 10 in 1983 (Schmitt & Warner, 2009).And although men are still more likely to beunion members than women are, women representan increasing proportion of union members,approaching 50 percent (U.S. Departmentof Labor, 2012). In 2011, workers in education,training, and library occupations had the highestunionization rate at 37 percent. Teaching is oneof the most popular occupations for college-educatedwomen in which unions are strong.Union membership varies dramatically bygeographical area, with states on the east andwest coasts much more likely to have high ratesof union membership than states in the south.Union membership varies considerably by economicsector as well: In 2011, public-sector workershad a union membership rate more than fivetimes higher than that of private-sector workers(37 percent compared with 7 percent; U.S.Department of Labor, 2012). Seeking out unionjobs can help women achieve economic security.RecommendationsHelp eliminate the pay gap and address the burdenof student loan debt. Here are some stepsemployers, public policy makers, and individualscan take.Employers Increase transparency in pay systems. Create clear structures for evaluation. Conduct internal pay equity studies and takesteps to address any gender disparities. Learn about implicit biases at www.implicit.harvard.edu.Public policy makers Strengthen pay equity laws, and pass the PaycheckFairness Act (S. 797/H.R. 1519). Protect Pell grants. Ensure that student loan borrowers are wellinformed about their borrowing options andthe terms under which they are borrowing.32 Graduating to a Pay Gap

Pass legislation that allows private studentloans to be discharged in the event ofbankruptcy. Increase awareness of the Income-BasedRepayment program for individuals overburdenedby student loan debt, and make theapplication process user-friendly. Protect student loan borrowers from abuses byprivate student lenders, servicers, and collectionagencies.High school and college students Educate yourself about typical salaries for variouscollege majors. Consider future earningswhen making the critical decision of collegemajor. Your choice will affect the economicsecurity of you and your family throughoutyour lifetime. If you must borrow money for college, educateyourself about the terms associated withpublic and private student loans. Exhaust yourfederal borrowing options before consideringmore risky private student loans. Attend a $tart $mart salary negotiation workshopat a campus near you.Recent college graduates Consider future earnings when deciding whichjob to pursue. Like college major, occupationhas a significant effect on earnings. Yourpaycheck affects many parts of your life, fromquality of life to your health to your retirementsavings. Choose your occupation carefully. Know what your skills are worth in the labormarket. Be skeptical of salary offers and payraises, and negotiate if you believe your contributionsare worth more. Consider pursuing a job where you are representedby a union.Parents and teachers Help your children and students understandthe financial implications of various fieldsof study and work so they can make wellinformeddecisions.AAUW members and other activists Join the AAUW Action Network. Subscribe toreceive e-mail notices to contact your membersof Congress when pay equity issues arebeing considered on Capitol Hill, find detailedinformation on legislation currently underconsideration, and write letters to the editor ofyour local paper. Get involved with AAUW’s $tart $mart salarynegotiation workshops, conducted in partnershipwith the WAGE Project. Recruit acampus to hold a $tart $mart salary negotiationworkshop, become a $tart $mart facilitator,encourage your branch or community tosponsor a $tart $mart facilitator training, orbecome a $tart $mart leader in your state. Use AAUW pay equity Programs in a Boxto educate your community about equal payissues and how to advocate for pay equity.ConclusionThe gender pay gap among college graduatesstarts immediately after graduation. Althoughmen are less likely to attend college than womenare, men who do invest in a college educationhave higher earnings than the women withwhom they graduate beginning in the first yearout of college. Among full-time workers just oneyear after college graduation in 2009, womenAAUW33

earned 82 percent of what men earned. This paygap is not merely the result of women’s choices.Among recent graduates who made the sameeducation and career choices, women still earnedjust 93 percent of what men earned, leaving a7 percent unexplained pay gap. We know fromprevious research (AAUW Educational Foundation,2007) that the pay gap only grows larger aswomen spend more years in the workforce.The pay gap has implications from the momentcollege graduates throw their caps in the air.More than half of women working full time andrepaying their college loans one year after collegegraduation are paying a higher percentage oftheir earnings to student loan debt than a typicalwoman can reasonably afford. Lower earningshave an immediate effect after college, settinginto motion a chain of disparities that will followwomen throughout their careers. Women experiencethe consequences of the pay gap fromtheir very first paycheck to their very last SocialSecurity check. Nearly 50 years after the passageof the Equal Pay Act of 1963, it is surprising thatwomen continue to earn less than men do, evenwhen they make the same choices. Making equalpay for men and women a reality will requireaction on the part of employers, public policymakers, and individuals.34 Graduating to a Pay Gap

AppendixMethodology and Regression AnalysisDataThis report is based on the 2008–09 Baccalaureateand Beyond Longitudinal Study, by the NationalCenter for Education Statistics at the U.S.Department of Education (U.S. Department ofEducation, National Center for Education Statistics,2012). This study provides nationally representativeinformation on the lives of studentswho received a bachelor’s degree between July1, 2007, and June 30, 2008, one year after collegegraduation.Sample selectionParticipants in the 2008–09 Baccalaureate andBeyond Longitudinal Study were chosen fromlists of enrolled students provided by institutionsparticipating in the 2007–08 NationalPostsecondary Student Aid Study. The sample ofapproximately 15,000 graduates who respondedto the 2009 survey represents the 1.6 millionstudents who completed the requirements fora baccalaureate degree between July 1, 2007,and June 30, 2008, in Title IV-eligible institutionsin the United States and Puerto Rico. Theweighted student response rate was 78 percent.To reduce within-sample variation in age andwork experience—both factors that affect labormarket outcomes—the sample in each year wasrestricted to those who were age 35 or youngerat the time of bachelor’s degree completion.To avoid the confounding influence of priorbachelor’s degrees, the sample in each year wasrestricted to those for whom the bachelor’sdegree that qualified them for participation wastheir first bachelor’s degree. Prior certificates,licenses, associate degrees, or postsecondaryenrollment without program completion werepermitted.Data collectionData collection included conducting a web- ortelephone-based student interview as well asobtaining administrative data from the U.S.Department of Education’s financial aid records,information on postsecondary institutions in theUnited States from NCES’s Integrated PostsecondaryEducation Data System, SAT and ACTscores from students who were under 30 yearsold, enrollment data from the National StudentClearinghouse, and student transcripts fromdegree-granting institutions.AAUW35

Data analysisAfter data collection, the Baccalaureate andBeyond data were edited, imputed, and weighted.Logical edits were imposed to correct inconsistenciesin responses. When participants did notprovide responses or provided incorrect datato individual items, hot-deck imputation methodswere used, in which data from similar caseswithin the sample were applied to fill in missingvalues. Analysis weights were computed to correctfor oversampling and undersampling of specificpopulations (e.g., oversampling of graduatesmajoring in STEM fields). These weights allowanalysts to generate estimates that representthe national population, not just the sample ofgraduates who responded to the survey. In addition,because the Baccalaureate and Beyond sampleis clustered—that is, students were sampled onlyfrom sampled institutions—replicate weightswere computed to allow variance estimates thattake the nonrandom sample design into accountto be computed. Cataldi et al. (2011) provide furtherinformation on the methods used in gatheringdata for the 2008–09 Baccalaureate and BeyondLongitudinal Study.Descriptive statisticsThe bivariate analysis presented in this reportallows us to understand the association betweenan individual variable and earnings. It also indicateswhether earnings for men and women aresignificantly different after controlling for onevariable.Regression analysisRegression analysis allows us to assess the combinedeffect of all the factors at the same timeas well as estimate the effect of gender on wagesnet of other factors.In estimating the regression equation, wedefined the dependent variable as the naturallog of average annual earnings. The resultingregression coefficients can be interpreted asthe percentage change in annual earnings for aone-unit change in the independent variable. Forthe regression, we specified an equation in whichlog annual earnings one year after graduationare a function of the employee’s characteristics,including job and workplace, employment experienceand continuity, education and training,and demographic and personal characteristics.We selected model variables from those examinedin the bivariate analyses on the basis of preliminarytests of multicollinearity. We enteredmulticategorical variables in their entirety evenif some categories were not significant. Weanalyzed earnings for all full-time workers andthose with multiple jobs. Variables that were notsignificant were not included in the final model(see figure 13 for a list of the variables used in theregression equation).We combined earnings for women and menand used an independent variable of gender tosee whether women’s and men’s earnings werestatistically significantly different after controllingfor other choices and characteristics. Theregression coefficient of gender (see the top linein figure 13) can be interpreted as the remainingpercentage difference in earnings when takinginto account the other variables in the model.This model shows that in 2009, women workingfull time or multiple jobs one year after collegegraduation earned, other things being equal, 6.6percent less than their male peers did. This estimatecontrols for differences in graduates’ occupation,economic sector, hours worked, employmentstatus (having multiple jobs as opposed toone full-time job), months unemployed since36 Graduating to a Pay Gap

FIGURE 13. Significant Coefficients from Regression of Log of Annual EarningsOne Year after College GraduationGender (female) -0.066Job and Workplace CharacteristicsOccupationOther white collar 1 †Business and management 0.246Life sciences —Math, computer, and physical science 0.323Engineering 0.464Nursing 0.401Other health professions —Education 0.174Social services —Sales —Business support —Other 2 —Economic sectorInstitution 3 -0.189For-profit —Nonprofit †All government 0.080Military 0.133Self-employed —Other —Hours worked per week 0.075(Hours worked per week) squared -0.001Multiple jobs -0.071Months unemployed since graduation -0.012Education and TrainingUndergraduate GPA 0.000Undergraduate majorEducation †Computer science, engineering, science, technology, math 0.125General studies 0.104Social sciences 0.070Humanities —Health 0.266Business and other applied 0.106Institution sectorPublic university †Private university —Public college —Private college -0.073For-profit four-year institution —Very selective institution 0.083Demographic and Personal CharacteristicsAge in bachelor’s completion year 0.018Region of residenceNortheast †Midwest -0.108South -0.092West, outside U.S. -0.059Marital statusSingle, never married †Married/cohabiting 0.052Divorced/separated/widowed —Multiple R2 0.3646Notes: This table includes 2007–08 bachelor’s degree recipients employed in one full-time job or multiple jobs in 2009. Results shown are significant at p < 0.05. This analysis excludes graduates older than age 35 atbachelor’s degree completion.Source: Authors’ analysis of U.S. Department of Education, National Center for Education Statistics, 2008–09 Baccalaureate and Beyond Longitudinal Study data.1The category “other white-collar occupations” includes social scientists and related workers (except clinical, counseling, and school psychologists); lawyers, judges, and related workers; education, training, and libraryoccupations (except primary, secondary, and special education school teachers); arts, design, entertainment, sports, and media occupations (except commercial and industrial designers, fashion designers, and floraldesigners); social science research assistants; and law clerks.2The category “other occupations” includes drafters; protective service occupations; food preparation- and serving-related occupations; personal care; service occupations (except supervisors, animal care and serviceworkers, and entertainment attendants and related workers); farming, fishing, and forestry occupations; construction and extraction occupations; installation, maintenance, and repair occupations; production occupations;transportation and material moving occupations (except air transportation workers); military specific occupations; farm/ranch/other agricultural managers; farmers and ranchers; cartographers and photogrammetrists;surveyors; athletes and sports competitors; coaches and scouts; umpire/referee/other sports officials; and emergency medical technicians/paramedics.3”Institution,” in this case, is defined as the school from which respondents earned their bachelor’s degree.— Results not significant (p > 0.05).† Reference category for comparison.AAUW37

graduation, grade point average, undergraduatemajor, kind of institution attended, age, geographicalregion, and marital status.Statistical significanceAll gender differences reported in the text andfigures are statistically significant (p < 0.05, twotailedt-test) unless otherwise indicated.Employment statusThroughout the report, earnings are reportedfor full-time workers only. In figures in whichfull-time employment status is not indicated, weinclude all 2007–08 graduates. In the regressionanalysis, we include full-time workers as wellas those with multiple jobs. Hours worked perweek and having multiple jobs are both significantcoefficients in the regression analysis.Regression resultsThe regression analysis of earnings one year aftergraduation for the combined sample of womenand men shows a gender pay difference of 6.6percent, controlling for education and occupationalchoices as well as demographic and personalcharacteristics (see figure 13). That is, whenwe include all the selected job and workplace,education and training, and demographic andpersonal variables, women earned 6.6 percentless in 2009 than men earned.Job and workplace characteristicsNot surprisingly, the regression results show thatoccupation exerts a strong influence on earnings.Graduates have higher earnings when theychoose business and management occupations;math, computer, and physical science occupations;engineering; nursing; and education comparedwith other white-collar occupations. 8The regression results also show that sector ofthe economy affects earnings. When we considerall the factors together, one year out of college,individuals working in the government or themilitary earned more than those working in thenonprofit sector. Graduates working for thehigher-education institution from which she orhe graduated earned less than those working inthe nonprofit sector.Hours worked per week significantly contributedto pay. Having multiple jobs and moremonths of unemployment were associated withlower earnings.Education and training characteristicsAlso not surprisingly, undergraduate majoraffects pay. Majoring in a health field, computerscience, engineering, science, technology, ormath was associated with higher pay comparedwith majoring in education. The same is true to alesser extent for graduates majoring in business,general studies, and social science. Attending aprivate college was associated with lower earnings,whereas attending a very selective institutionwas correlated with higher earnings.Age at the time of bachelor’s degree completionaffects earnings positively (for this sample,8The category “other white-collar occupations” includes social scientists and related workers (except clinical, counseling, and schoolpsychologists); lawyers, judges, and related workers; education, training, and library occupations (except primary, secondary, and specialeducation school teachers); arts, design, entertainment, sports, and media occupations (except commercial and industrial designers, fashiondesigners, and floral designers); social science research assistants; and law clerks.38 Graduating to a Pay Gap

which included only recent graduates ages 35 andunder), although the effect is small. Individualsliving in the northeast earn more than peopleliving in other parts of the country. Being marriedor cohabiting is also associated with higherearnings.SummaryOverall, the regression analysis of earnings oneyear after graduation suggests that a 6.6 percentdifference in annual earnings remains betweenwomen and men after accounting for all variablesknown to affect earnings. This is referred to inthe text as the “unexplained” wage gap betweenmen and women.AAUW39

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Women in Science,Technology,Engineering,and MathematicsAAUW Research ReportsRecent AAUW reports may be downloaded for free at www.aauw.org/research.Crossing the Line: SexualHarassment at School (2012)Women at Work (2003)Why So Few?Why So Few? Women in Science,Technology, Engineering, andMathematics (2010)Harassment-Free Hallways:How to Stop Sexual Harassmentin Schools (2002)Where the Girls Are: The Facts AboutGender Equity in Education (2008)Hostile Hallways: Bullying,Teasing, and Sexual Harassmentin School (2001)Behind the Pay Gap (2007)The Third Shift: WomenLearning Online (2001)Drawing the Line: SexualHarassment on Campus (2006)Beyond the “Gender Wars”:A Conversation About Girls,Boys, and Education (2001)Tenure Denied: Cases of SexDiscrimination in Academia (2004)¡Si, Se Puede! Yes, We Can:Latinas in School (2000)Under the Microscope:A Decade of Gender EquityProjects in the Sciences (2004)Tech-Savvy: Educating Girls inthe New Computer Age (2000)

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