A ‘gender promotion gap’ fuels wealth inequality between men and women, Yale professor says

Progress toward narrowing the gender pay gap has mostly stalled, in part due to something researchers call the “gender promotion gap.”

“Women have noticeably lower promotion rates compared to men in the same firm, in approximately the same position,” Kelly Shue, a professor of finance at Yale School of Management, said at CNBC’s Women & Wealth event Wednesday.

Women are about 13% less likely to be promoted than men, according to Shue’s research.

That imbalance is a major driver in the persistent income inequality between men and women, she said.

About 70% of the gender wage gap is due to women occupying different positions compared to men, according to Shue. But even when men and women occupy the same position, women are paid less, she added.

As it stands, women earn just 84 cents for every dollar earned by men, according to an analysis of U.S. Census Bureau data by the National Women’s Law Center.

Women in corporate America have come a long way but there are still barriers at the outset, largely due to systemic bias, the annual Women in the Workplace study from Lean In and McKinsey also found.

“They remain less likely than men to be hired into entry-level roles, which leaves them underrepresented from the start,” Lean In’s report notes.

From there, advancements are slower at the manager and director levels, the report found: Only 81 women are promoted for every 100 men.

“Because of this ‘broken rung’ in the corporate ladder, men significantly outnumber women at the manager level, making it incredibly difficult for companies to support sustained progress at more senior levels,” according to Lean In’s report.

When it comes to promotions, “unconscious bias can creep in,” Shue said. When we imagine the most successful managers, they tend to have stereotypically male qualities, she said, “such as being optimistic, courageous, having an aggressive leadership style, embracing competition, etc.”

To alleviate some of that bias, “a lot of the advice has been focused on how female workers can change how they behave, and advocate for themselves and engage in some degree of self-promotion,” Shue said.

“I think that could be affective,” she added, “but I would also argue that instead of putting all of the burden on women to behave differently, and to advocate for themselves, it would be great if firms and the managers in charge of these decisions also stop rewarding… this aggressive behavior to the same extent and instead just recognize that many female workers actually have high potential.”