Women Entrepreneurs Pay Themselves Less


Recent studies have found that women entrepreneurs tend to pay themselves less than their male equivalents. There is a debate to why this is. Some theories contribute this to the way women negotiate. Others theorize that this is because women are often discriminated against and/ or their career choices differ from men.

But what is particularly interesting is that women tend to be more satisfied in their careers than men are, even though women tend to pay themselves less. The reason for this may be because women tend to value the contribution they make to society, more than they value a high salary. Men, on the other hand, tend to value high wages a great deal more. Furthermore, women’s satisfaction with their business success appears to have nothing to do with the amount of sales they generate.  Women tend to focus more on their business’ social success, as opposed to its commercial success.

And just in case you thought this was just a trend with women and men in social entrepreneurial fields, think again. Kristen Roche, director of the MBA program at Mount Mary University in Milwaukee, along with co-author Keith Bender, professor of economics at the University of Aberdeen in Scotland, found that even among science, technology, engineering and math careers, the same conclusion was made. The authors found that salary and advancement were generally less important to women. And women tended to place value on the location of their business as well as the ways they contribute to society.

In contrast, men tend to be more concerned with salary: 33 percent of male entrepreneurs said that salary was very important to them, whereas only 29 percent of women had the same viewpoint.  In regards to valuing contributions  to society, 37 percent of self-employed men found it to be important, while 46 percent of women found it of high value.

Other research has found that other factors may be at play. For example, the Diana Project (an initiative at Babson College that promotes women entrepreneurs), found that only 2.7 percent of companies that received business capital from 2011 to 2013 were run by female CEOs.  So the reason female entrepreneurs pay themselves less may be because it can be more difficult for them to attract the money in the first place.

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