Women at the top of business outearn men

A Carnegie Mellon University study has concluded that women executives out-earn their male counterparts.

The study, which examined 16,000 executives over 14 years, found that women at the top of the business world bring in a bit more than men and are promoted at the same rate, countering the popular notion that women earn less than men for the same work.

"That common perception is not borne out by this study," said Robert A. Miller, professor of economics and strategy and one of the authors. "If you're looking for evidence of gender discrimination in executive promotion and compensation, it's not happening there."

The study, "Are There Glass Ceilings for Female Executives?," was released last month by Carnegie Mellon's Tepper School of Business but hasn't been published yet.

The largest empirical analysis of the top echelons of publicly traded companies determined that women earned about $100,000 more per year than men of the same age, educational background and experience.

Unlike some studies that have relied on aggregate statistics to indicate a gender pay gap, this one took multiple variables into account.

"Once you control for the position that they're in, that is, their rank, and you control for experience and control for their education, background and turnover, once you do that you find that they earn a little more," said Dr. Miller.

The paper does not address why women make more and not the same as men, although one possibility is that women who rise to the top of corporations have some innate qualities that haven't been -- and maybe can't be -- quantified.

Female executives on the whole still earn less than male executives, but that's because more women quit before they reach the top, the study says.

"At any given level of the career hierarchy, women are paid slightly more than men with the same background, have slightly less income uncertainty and are promoted as quickly," it concludes. "We concluded that the gender pay gap and differences in job rank in this most lucrative occupation is explained by females leaving the market at higher rates than males."

Why they quit is harder to explain. Younger women opt out of the work force to have babies, but the average age for executives in the study was 53, beyond the child-bearing years.

Yet female executives still retire earlier than men and are more likely to switch careers. The CMU paper offers some possible reasons, including "more unpleasantries, indignities and tougher, unrewarding assignments" at work. The authors also suggest that women over time acquire "more nonmarket human capital" than men -- meaning connections outside the workplace -- that make retirement more attractive.

"They're definitely leaving and we don't know why," said Dr. Miller. "That's the variable."

He and the other researchers, George-Levi Gayle and Limor Golan, both assistant professors of economics, hope to address that issue in the future by controlling for the rate of retirement. "That is the piece that we want to write next," he said.

The study didn't initially seek to analyze gender inequity but rather to look at the role of "human capital" -- skills and knowledge -- in determining promotions at corporations.

"But this sort of jumped out and hit us in the face," said Dr. Miller.

Some studies had indicated female executives were paid the same as men, but those didn't address the rate of promotion as this one does, he said.

More recent studies reached similar conclusions. A report released last month by The Corporate Library, a research firm in Maine, said women corporate directors earn 15 percent more than male counterparts, although they are still outnumbered 8-1 by men on boards.

The CMU study compiled data representing 60 different job titles at more than 1,800 companies between 1992 and 2006. In addition to examining promotion rates, the researchers also analyzed total compensation, including benefits, bonuses, retirement packages and stock options in addition to salary. Overall, the study concluded that job turnover and tenure are better indicators of compensation than gender.