WomensNet News

February 24th 2014

Study: Female Entrepreneurs Pay Themselves Less Than Male Entrepreneurs

A recent study from Babson College showed that female entrepreneurs pay themselves less than their male counterparts.

The study surveyed graduates of Goldman Sachs’s 10,000 Small Business Program. And it determined that women who entered into the program had average salaries that were just 80% of male entrepreneurs’.

Patricia Green, leader of the study, admitted that the results shocked her research team.

“I’m not sure if it’s benchmarking against salaried women, I’m not sure if it’s a lack of confidence [and] I’m not sure if it’s negotiating themselves down first. Sometimes women have a tendency to say, ‘I couldn’t possibly ask that. I’d better recalibrate that before I put that number out there.’”

Ariane Hegewisch, a study director at the Institute for Women’s Policy Research, suggests that women may be more risk averse, “keeping more money in the business until they are certain it will work out.”

While there may be some conservative tendencies, we’d hesitate to make a blanket conclusion based on 1 study. The type of business you enter into certainly plays a role. And who says there’s one “right” way to allocate personal funds and business funds? Regardless, we only hope that women entrepreneurs take home a paycheck that reflects their professional efforts.

Stay motivated, stay focused, and stay strong.

-The WomensNet Team