The gender pay gap continues to affect MBA graduates, according to Payscale’s 2025 Gender Pay Gap Report. Here’s why this issue persists—and how business school can help women MBAs
This year's Gender Pay Gap Report (GPGR) by PayScale, reveals a small widening of the gender pay gap in the US, despite the recent enactment of several pay transparency laws.
According to the report, this disproportionately affects MBA graduates, with the widest gender pay gap documented between male and female MBA grads.
But what is the gender pay gap and how has it manifested? And what steps can business school grads take to generate change and close the gender pay gap for themselves and society as a whole?
BusinessBecause dives into the key findings from the report, speaking with business school experts to uncover tangible ways MBAs can work to narrow the gap and help construct a more financially equitable society.
What is the gender pay gap?
The gender pay gap is a measure of the disparity in pay between men and women’s average earnings. Research into the gender pay gap, such as PayScale's report, is designed to promote gender equality by highlighting the reality of gender-based pay inequalities and encouraging employers to make changes that level the playing field for women.
According to PayScale’s 2025 report, where factors such as education and job function are not controlled, in 2025 women earn just $0.83 for every $1 a man earns. This remains unchanged from last year, emphasizing the need for immediate action.
However, where these factors are controlled, meaning women’s pay is compared to men in the same jobs with similar qualifications, a small gender pay gap remains, with women on average taking home $0.99 for every $1 a man earns. This means that some women are still receiving unequal pay for the same work.
Uncontrolled versus controlled: What the data tells us
Uncontrolled data offers a broader insight into gender equality, conveying how attitudes towards women may more generally impact their pay. With a $0.17 gap between men and women, the data suggests that society overall values the contributions of women in the workplace less than it does men. It also implies that women are overrepresented in lower-paying occupations, steering away from higher-paying positions as a result of gender-based discrimination and gender norms.
Examining the gender pay gap within similar jobs and roles, controlled data provides a detailed look into whether we, as a society, can claim equal pay for equal work. While $0.99 to every $1 may, at first glance, seem insignificant, it ultimately demonstrates that equality has yet to be achieved for women.
Together, the data sets highlight the persistence of harmful systemic inequalities in the workplace, conveying how both wealth and power are gendered in favor of men.
Key takeaways for women
It can be hard to keep up with all the facts, so here are the most important gender pay statistics that are impacting women throughout the US in 2025:
The gender pay gap can be partially explained by the ‘motherhood penalty’
Finding that mothers earn only $0.75 for every dollar earned by fathers when factors are not controlled, and $0.98 when these factors are controlled, PayScale uncovered what it identifies as the 'motherhood penalty'—the idea that women are financially penalized by employers for having children, while men are not.
This idea is further supported by data from individuals without child-caring responsibilities, with women without children keeping pace with the earnings of men without children.
The report also found that the ‘motherhood penalty’ significantly impacts women of color, who earn substantially less when compared to white male parents, when the data is controlled.
Collectively, this data suggests that for all women, becoming a mother is often followed by the prospect of lower pay. Factors such as women taking on more childcare responsibilities than men and subsequently having to reduce their working hours have shaped this result.
The gender pay gap widens as women age
Women face ageism in the form of pay disparity, with data from PayScale’s report highlighting a widening of the pay gap as women age.
When the data is not controlled, women between the ages of 20 and 29 earn $0.86 for every $1 that men earn. By 45, the data reveals that this drops to $0.72 for every $1 men earn.
According to the National Center for Health Statistics (NCHS), a growing number of women aged 40 and over are having children. As a result, motherhood is predicted to impact Payscale’s data, with women incurring the ‘motherhood penalty’ at all different ages now more than ever before.
The gender pay gap persists for highly educated women, even MBAs
Even women armed with prestigious qualifications still face the gender pay gap, suggesting that higher education does not always lead to pay equity for women.
The widest uncontrolled gap was documented for women with MBAs. For every dollar a man with an MBA earns, a female MBA grad takes home only $0.77. This statistic has persisted year after year, reflecting a real need for change to turn stagnation into positive advancements for women.
However, it is important to note that, while the average starting salary for MBA grads in the US is estimated at approximately $120,000, according to the Graduate Management Admission Council (GMAC), none of this suggests they earn low salaries—just that they earn less in comparison to men with the same qualification.
PayScale pinpoints two reasons for the pay gap among women with an MBA: pursuing less desirable, lower-paying concentrations and opting for roles without extensive overtime to balance motherhood.
However, Laura Kray, the faculty director for the Center for Equity, Gender, and Leadership at the University of California, Berkeley, Haas School of Business, who has conducted extensive research into the gender pay gap, notes that it may be more complex than PayScale suggests:
“Several factors are at play here,” she says. “First of all, the MBA is a male-dominated, high-earning degree; as a result, the small pool of women we are calculating with have immensely high salaries to compete with.
“There is also a societal bias that associates men with leadership roles. As a result, women may be less likely to assume high-paying positions within businesses,” she adds.
Laura expresses that gender bias and norms still negatively impact the earnings of women who do reach managerial positions.
“We also find that men and women in similarly ranked managerial positions get sorted into different types of teams, with men assigned to larger teams than women. This contributes to the pay gap because leading larger teams corresponds with greater compensation,” she says.
Esha Mendiratta, professor of International Business at Vlerick Business School, shares a similar sentiment, observing that it is multifaceted. There is no singular cause; it is all part of a connected web of systemic issues.
“As PayScale says, one plausible explanation for this gap is that men are more likely to pursue finance specializations, which lead to more lucrative careers after graduation. However, we must look deeper into this issue. We need to ask the systemic reasons why women are less inclined to enter these fields.”
5 ways MBAs can help to narrow, or even close, the gender pay gap
Thankfully, there are some ways MBAs can work to reverse these trends—here’s how.
1. Promote pay transparency
Promoting pay transparency is generally considered the most efficient way to decrease the gender pay gap, as it allows women to identify and challenge the issue at hand.
However, Esha from Vlerick argues that traditional pay transparency can create unhealthy peer comparisons and trigger low morale. She suggests that MBA grads should push for alternative forms of pay transparency, such as cross-form pay transparency, where employers post job salary ranges.
“This transparency encourages applicants—particularly underpaid ones—to redirect their job searches toward higher-paying firms. Additionally, such policies make competitor pay practices visible, increasing market competition that drives wage growth.”
2. Encourage internal audits
With years of research, Laura from California, Berkeley proposes that MBAs should encourage companies to conduct audits to address the issue of negotiations:
“MBAs should encourage the organizations they work for to conduct audits to ensure consistency in how they respond to negotiations by current and prospective employees for higher compensation and promotions.
3. Collaborate with business schools
Collaboration with business schools is key. Esha from Vlerick argues that if individual business schools notice women predominantly opting for different specializations than men due to systemic factors such as gender norms, they should consult with students to ensure the right choices are being made.
“They need to understand the root cause and use formal and informal mechanisms, such as scholarships and alumni mentorship, to encourage both men and women to make choices based on their motivations and skills.”
MBA students can also raise this issue with their schools, advocating for initiatives that support equal opportunities and challenge traditional gender norms to help reduce the gender pay gap.
4. Push for inclusive practices for working parents
With the motherhood penalty expected to be one of the major factors shaping the gender pay gap overall, pushing for inclusive practices for working parents could benefit MBA holders when they enter the workforce.
“Among inclusive work practices for parents, affordable childcare seems critical, as it gives both partners a range of choices—whether both take up demanding jobs or one does,” says Esha from Vlerick.
5. Work together
Lastly, the greatest change occurs when we work together. As such, it is vital that both male and female MBAs collaborate to narrow the gap. While it disproportionately affects women, it is not a burden they should carry alone.
