The glass ceiling: Three reasons why it still exists and is hurting the economy.

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The glass ceiling: Three reasons why it still exists and is hurting the economy.

The glass ceiling, that invisible barrier to advancement that women face at the top levels of the workplace, remains as intractable as ever and is a drag on the economy.

New research, as yet unpublished, from the Chicago Booth Business School finds while there’s plenty of anecdotal evidence that sexism has prevented many talented women from achieving their full potential at work, there are factors beyond gender discrimination in the workplace that are holding women back.

What the researchers say: “In a world where talent is distributed equally among women and men, an economy that does not fully tap into the leadership skills offered by women is necessarily inefficient,” says the lead author. “Talent is left on the table when women are not placed in leadership positions, and the economy suffers.”

In their working paper, the researchers review the extensive literature surrounding the glass ceiling, and find three key reasons why the glass ceiling persists in excluding women from top-paying jobs.

  • Women with college degrees often choose to work in fields that offer lower incomes. Although women have surpassed men in educational attainment, they are vastly underrepresented in top-paying jobs. About 40 percent of women born in America in 1985 hold college degrees, compared to just under 30 percent of men—yet women’s educational advantage hasn’t led to higher pay. One reason for the pay gap: college-educated women, more often than men, avoid majors that lead to higher-earning occupations.
  • Psychological differences between men and women could account for up to 10 percent of the pay gap. Much of the existing research concludes that women are more risk-averse than men are. The willingness to take risks helps employees compete for higher paying jobs and negotiate higher salaries. “Whether men and women are born with different attitudes toward risk or the differences are taught, understanding the role of nature versus nurture is key to closing the gap,” the lead author says (most recent research indicates that women are actually more risk averse than men due to the greater level of testosterone in men).
  • The demands for child care, housework and other life chores outside of work fall more heavily on women than on men. Higher paying occupations are more inflexible and require more time commitment. Women have a harder time with this inflexibility because they remain disproportionately responsible for taking care of the home, including raising children. Indeed, childcare is one of the most prominent factors holding back women’s earnings at the executive level. The research has also found that when wives earn more than their husbands do, it is difficult on the relationship, and the marriage is more likely to be unhappy or end in divorce.

While family-friendly work policies such as longer and paid maternity leaves, paternity leaves, optional part-time or shorter work hours, and the opportunity to work remotely, help address women’s need for greater flexibility, they fail to address the earnings gap. No one policy will be able to crack the glass ceiling, the researchers say. But they are hopeful that technological advances could pave the way for change.

So, what? This is a fascinating paper, and I think for the most part it’s on target. Increasingly the professions—at least at the lower levels—are becoming dominated by women due to their overall higher levels of education. Inevitably, I believe, that will lead to their breaking through the pay glass ceiling in greater numbers.

Interestingly the increasing use of technology has already led to (or maybe pandered to) a greater risk aversion in businesses—the whole point of AI and robots is to reduce risk—and this will play into women’s genetically-driven risk aversion.

Risk aversion does not necessarily mean less agility, creativity or innovation but it does mean that each of those is more likely to be done a bit more slowly and in a cooperative rather than individualistic way.

Dr Bob Murray

Bob Murray, MBA, PhD (Clinical Psychology), is an internationally recognised expert in strategy, leadership, influencing, human motivation and behavioural change.

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