Gender, Parental Status, and the Wage Premium in Finance

Abstract

Previous research documents a growing wage premium for elite financial workers since the 1980s. A second line of research finds substantial gender disparities in earnings and career mobility among elite financial workers. Yet little is known about whether women in finance still receive a wage premium compared with their nonfinance counterparts. In addition, few studies examine whether similar gender disparities exist among nonelite financial workers. This article examines how the wage premium for working in the financial sector varies by gender and parental status across the wage distribution. We report that women earn a greater wage premium than men in low-wage financial jobs, while almost all of the increase in wages in high finance is captured by elite men, particularly fathers. Consequently, the financial sector simultaneously exacerbates and mitigates gender inequalities at different locations of the labor market. Our findings highlight the significance of institutional context in amplifying and attenuating the reward and penalty associated with gender and parental status.