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Research Paper on Gender Pay Gap in Finance Field

Jennifer Nguyen

Texas Christian University

English Inquiry

Dr. Said

October 12, 2021

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Introduction

It is the fourth year consecutively that the gender pay gap in the finance sector is the

highest in the industry (Callanan, 2021, para 3). The salary of an average man in the financial

field is about 25% higher than the salary of an average woman (Katsanos, 2019, para 2). Also,

the mean hourly pay gap between men and women is from 14.3% to 30% in the financial field

(Katsanos, 2019, para 4). The fact that there is gender pay gap across the business world,

especially in financial services, is no longer a secret. Since 2017, 42% of working women in a

survey indicate that they experience gender discrimination in inequality wage, and this number

gradually improves over time, but not significantly (Barroso & Brown, 2021). The reasons to

gender pay gap are that people consider putting women in leadership role as risky, that women

have lower performance compared to men and that women should spend more time taking care

of kids than working in the office, which reduces the chance of them receiving promotions as

well as the economy of the nation since the country is not optimizing its human resources.

Causes

To begin with, one of the factors in company structure and gender roles contribute to the

pay gap between men and women. According to the survey of the Investment Association, only

11% of the respondents had a woman as a CEO or chairperson role, and senior roles mean higher

salary (Katsanos, 2019, para 4). While most of the lower generic positions are filled with

women, women hardly receive promotions for upper roles that can give them better wage. There

are research on why women are less likely to apply for and receive promotions for these leading

roles. One of the reasons is stereotypes on gender roles. It is believed that women have more

household role than society role. They are supposed to spend more time nurturing the children,

making dinner, and taking care of the family. The men are supposed to go to work, make money,
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and find a stand in the society (United Nations). The belief about gender roles makes women

seem inferior to men, especially in their influence in working environment. Although in the

current modern world, issues relating to gender stereotypes and sexism have been addressed and

received more attention, in certain parts of the world, mostly underdeveloped or developing

nations like Togo, India and Afghanistan, women still receive education later than men, and they

tend to have lower education (Hares, 2019, para 3). According to the data shown in Hares’

article, in Afghanistan, while men have about six years of schooling, women only have about

two years (Hares, 2019, figure 1). Thus, in developed countries, the beliefs on gender roles no

longer hold as true and strong as they were, but these antiquated views still remain highly

popular in underdeveloped and developing countries.

In these underdeveloped and developing countries, some families are more conservatives and tie

themselves to the belief of gender roles as well as how son is better than daughter (Sivak &

Smirnov, 2019, para 2). Thus, sons usually receive better education than daughters, or they are

considered as “worth the investment” more than the daughters. Also, it is a long-term assumption

that men are usually better at science, math, or logical thinking than women (Gender Equality

Law). Hence, in the finance field that requires more analyzation, critical thinking, and high
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education, men are considered “better fit” for the jobs, especially when women tend to have

lower education level and usually think and act more emotionally. These rooted beliefs have

been growing and dominating people’s minds for a long time. Even in the current modern and

open-minded world, there is still subtle existence of these beliefs and stereotypes in the society

mind, which diminishes women’s potential and performance. Specifically, during one

experimental research by a university in Barcelona, it is found that on average, women are 30

percent less likely to be called for a job interview than men (Barcelona, 2019, para 1). This

diminishment eventually leads to less consideration for women to be a potential for promotions

as well as the low number of women in leadership role in businesses, which then results in the

wage inequality between men and women in the field.

Beside the belief on education and women’s low performance, another reason for why

women receive fewer promotions is interruptions and discontinuities. Specifically, throughout a

woman’s life, she experiences pauses for marriage, pregnancy, taking care of the other siblings,

worrying about elder parents, or even because of change in her husband’s work (Gillin, 2020,

para 3). The inconsistency makes it harder for the woman to receive promotion or higher paid

wage. Not only the inconsistency in professional life, but the amount of responsibility the woman

needs to take on her after each new changing stage of her life is too time-consuming for her to

focus or spend more time on working higher positions that require more attention and effort.

These interruptions make it even harder for women in the finance industry. In an interview with

Trang Nguyen, a branch manager of Vietcombank, one of the largest banks in Ho Chi Minh City,

Vietnam, she claims that most of the bank tellers, a generic basic position in the bank, are

female, but most of leadership roles like Chief Digital Officer or Chief Analytics Officer are

filled with men. She asked some of the female bank tellers about why are they not going to apply
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for higher positions, and the responses she received are similar on how they do not want to aim

higher because they know that they are not going to make it due to the known bias towards men,

how they will not have enough time to take care of their family after receiving promotions, or

how a woman does not need to work that hard for a position, but instead just get married to a

wealthy successful man (T. Nguyen, personal communication, October 5, 2021). These women

have been growing up being reminded of how their main life goal is to get married, have a

family, and stay home to take care of their family. They are tied to the societal norms and

expectations about women’s household roles and do not know how to escape these beliefs to

pursue their own career freedom, especially in the male-dominated finance industry.

Effects

The low number of women’s participation in the leadership roles in the finance sector is a

loss for the field as well as the nation’s economy. More than 90% of the leading companies in

the finance field consider about gender diversity during their recruitment process, which proves

that the higher gender diversity the companies have, the better they perform. By cutting out the

opportunities for women, the company is also cutting out the opportunities for itself to have a

more rounded view of the customers as well as half of the human resources it could have

invested in (Chin et al., 2020). The huge gender pay gap will eventually diminish the chance and

willingness of women in the future generations to follow this field. In the field that has both male

and female customers but no female employers to discuss and incorporate the female perspective

in certain problems and products, the field will lose half of its customers. Therefore, financial

companies are losing their chances to invest in women, which results in a stagnancy in the

finance sector. Since finance is a crucial part of the economy of every country, the slow

development of it will also impair the economy of the entire nation.

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Conclusion.

Not only in finance industry, but gender pay gap is a common problem that occurs in

every field, from business, to politics and education. By shortening this pay gap in the finance

field, researchers and employers can have a better idea on how to solve this similar issue in other

fields to bring back the equality for both men and women and the significant development for

different fields as well as the world’s economy. Some changes are already being enforced, and

by having plans regarding promoting women education and reducing societal gender norms

taken seriously, the problems about gender pay gap will be solved in the near future.
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References

Barcelona, U. P. F. (2019, March 26). Women are 30 percent less likely to be considered for a

hiring process than men. Phys.org. Retrieved November 28, 2021, from

https://phys.org/news/2019-03-women-percent-hiring-men.html

Barroso, A., & Brown, A. (2021, May 25). Gender pay gap in U.S. held steady in 2020. Pew

Research Center. Retrieved October 7, 2021, from https://www.pewresearch.org/fact-

tank/2021/05/25/gender-pay-gap-facts/

Chin, S., Krivkovich, A., & Nadeau, M.-C. (2020, January 17). Closing the gap: Leadership

perspectives on promoting women in Financial Services. McKinsey & Company.

Retrieved October 10, 2021, from https://www.mckinsey.com/industries/financial-

services/our-insights/closing-the-gap-leadership-perspectives-on-promoting-women-in-

financial-services

Examples of gender stereotypes: Gender-equality-law. gender. (n.d.). Retrieved October 10,

2021, from https://www.genderequalitylaw.org/examples-of-gender-stereotypes

Gender stereotyping. OHCHR. (n.d.). Retrieved October 7, 2021, from

https://www.ohchr.org/en/issues/women/wrgs/pages/genderstereotypes.aspx

Gillin, H. (2020, March 9). How career interruptions affect women. Texas A&M Today.

Retrieved October 10, 2021, from https://today.tamu.edu/2020/03/09/how-career-

interruptions-affect-women/
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Hares, P. J. and S. (2019, June 17). Mind the gap: 5 facts about the gender gap in Education.

Center For Global Development. Retrieved October 7, 2021, from

https://www.cgdev.org/blog/mind-gap-5-facts-about-gender-gap-education

Katsanos, K. (2019). Assessing the gender pay gap in the finance sector. spark. (2021, January

13). Retrieved October 7, 2021, from

https://www.adp.com/spark/articles/2019/09/assessing-the-gender-pay-gap-in-the-finance-

sector.aspx

Sivak, E., & Smirnov, I. (2019, February 5). Parents mention sons more often than daughters on

social media. PNAS. Retrieved October 10, 2021, from

https://www.pnas.org/content/116/6/2039

Reflection Questions

1. I feel good about the cohesive and flow of my paper.

2. I’m not totally sure about how to cite the chart properly and whether my headings are in

the correct format.

3. My specific question for Dr. Said is do you think I get to the root cause yet?
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4. I think she’ll say yes because I can’t find an exact answer for why there is more bias

towards men than women.