Women earn less than men even when they set the pay

From Emma Jacobs at The FT:

That women earn less money than men is well known. But research has revealed that even when women start their own not-for-profit “social enterprises” they pay themselves less than their male peers.

The study, comprising 159 social entrepreneurs in the UK, showed an adjusted pay gap between the sexes of about 23 per cent. That is similar to the global difference in earnings between men and women. The International Labour Organisation estimates that to be about 23 per cent – meaning that, for every £1 men earn, women earn 77p.

…The new research, by academics at London Business School, Aston University and the University of Antwerp, mirrors previous findings on the salaries earned by male and female founders of for-profit companies. A report on Goldman Sachs’ 10,000 Small Businesses programme, noted that female participants, on average, paid themselves 80 per cent of the salary of male participants.

Saul Estrin, visiting professor of strategy and entrepreneurship, London Business School, and co-author of the latest report, points out that the differences cannot be explained by discrimination since these chief executives set their own pay.

He looked at the entrepreneurs’ job satisfaction and found female social entrepreneurs to be more satisfied with their role than their male counterparts.

One hypothesis suggested in the article is that the female entrepreneurs prioritize autonomy over higher pay and end up happier in these jobs, relative to their alternatives, than do the male entrepreneurs.


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