At a glance
- Diverging work experience patterns drive a “work-experience pay gap” that makes up nearly 80 percent of the total gender pay gap, equal to 27 cents on the dollar among US professional workers. Women tend to build less human capital through work experience than men who start in the same occupations, as seen in the tens of thousands of career trajectories we analyze. Over a 30-year career, the gender pay gap averages out to approximately half a million dollars in lost earnings per woman.
- One-third of that work-experience pay gap is because women accumulate less time on the job than men. Women average 8.6 years at work for every ten years clocked by men because, on aggregate, they work fewer hours, take longer breaks between jobs, and occupy more part-time roles than men.
- The other two-thirds arise from different career pathways that men and women pursue over time. Women’s careers are as dynamic as men’s: Both men and women averaged 2.6 role moves per decade of work and traversed comparable skill distances in each new role. However, women are more likely than men to switch to lower-paying occupations, typically ones involving less competitive pressures and fewer full-time requirements.
- As women switch jobs, they are less likely to move into occupations projected to grow in demand, instead often moving into shrinking occupations. Should current occupational pathways persist, by 2030, more than three-quarters of working men would be in occupations projected to grow relative to today, compared with less than two-thirds of women. The overall gender pay gap could remain at current levels.
- Some employers enable greater movement into growing occupations for all workers while reducing the gender pay gap, even adjusting for the industry mix. These “People + Performance Winners” excel in both financial performance and building human capital. They stand out for rotating people internally, focusing on coaching, and fostering a culture that challenges employees while empowering them.
Whether sorting packages in the mailroom, coding in Python, or tending to patients, everyone starts their career somewhere. Yet in most industries, a first job is merely an entry point. What happens over the course of a career is crucial to building an individual’s human capital.
Human capital is formally defined as the knowledge, skills, competencies, and attributes that individuals possess. Its accumulation begins in childhood and continues throughout educational stages and working life. The value of human capital is realized when people put it to work—that is, by gaining work experience—and pay is an important signal of that value.
Work experience, pay, and human capital itself are linked in complicated ways, and the threads are hard to unravel. One worker may enjoy pay hikes as she moves from one role to another and acquires additional skills, a pattern of work experience that enhances both her human capital and the way it is valued through her pay. But another worker may see her human capital eroding over time as her skills go unused in a lower-paying role that doesn’t require them. In this case, both human capital and its value diminish. Meanwhile, two workers who started out possessing similar skills may go on to earn differing levels of pay when they switch into roles with varying organizational and industry characteristics, indicating that the same human capital is valued differently in the two jobs.
Overall, however, work experience is vital to both individuals and economies. For individuals, work experience underpins nearly half of lifetime earnings. For economies, work experience reflects how effectively human capital is matched with employers’ needs to raise productivity. In this context, comparing the work experience trajectories of men and women assumes its importance.
Women have narrowed and even reversed the gender gap in education in the United States. Yet only 58.7 percent of women participate in the labor force, compared with 70.2 percent of men. And what women and men do at work diverges significantly over time. Our research finds that that divergence, over a decade or more of work, drives almost 80 percent of the gender pay gap of 27 cents on the dollar—what we call the “work-experience pay gap.” (See sidebar “Definitions of the gender pay gap vary.”)
To arrive at this conclusion, we analyzed how men and women go about accumulating work experience—switching jobs, returning after breaks, climbing the corporate ladder, making lateral moves, downshifting, and more—and how they realize the value of human capital differently (in terms of pay). This privileged, close-up view is possible because we use a data set of some 86,000 de-identified online career histories of real people in the American workforce. Our data set is overweighted with white-collar, higher-paying jobs because people with public-facing, online work histories are more likely than the general population to hold them—and they are of particular interest to talent-scouting employers.
This research focuses on the extent, nature, and impact of divergence in work experience patterns and its effect on the pay gap between men and women. While gender pay gaps have been well studied by other researchers, we add to the discourse by dissecting the dynamics of work experience gained over time (Exhibit 1).
A diagram shows simple illustrations of two figures representing workers, and arrows flowing from left to right representing their career paths over ten years. The figures and arrows are placed on a grid of five tiers stacked vertically, each representing a higher income quintile as the workers move upward. Both workers start in the fourth quintile in Year 1 on the left, with one worker moving up to the third quintile in Year 10, while the second worker moves higher, to the second quintile in Year 5 and the top quintile in Year 10.
We emphasize that we do not directly investigate the reasons that they diverge. Women and men may intentionally choose to pursue different paths for a variety of reasons relating to opportunity and personal agency, with complex underlying factors that are difficult to untangle. For instance, personal preferences might lead women and men to opt for different kinds of work, or they may assign meaning to their work in different ways. At the same time, not all doors may remain open to all workers at every stage of life. As other research has explored, women may bear more responsibility for caregiving and household chores, while men may shoulder greater breadwinning responsibilities, which can restrict career choices for both. Whether or not those traditional or stereotypical responsibilities hold sway lies outside the scope of this article. (For details, see sidebar “Our data, scope, and methodology.”)
The gender pay gap highlights differences in how men and women realize value from their human capital. Over a 30-year career, we estimate, women earn about $500,000 less than men, on average. This loss of pay—and productivity, by implication—takes on particular importance in the context of tight labor markets and future demographic headwinds, with fewer workers potentially needing to support more retirees and fuel the nation’s economic engine. As automation and AI transform the nature of work and the skills required in the economy, optimal talent utilization is becoming a critical issue.
Women’s work experience patterns diverge from men’s on two key dimensions: time and mobility
Women actively change roles and traverse similar skill distances when compared with men, but they spend less time in paid work, on aggregate, and they navigate their careers in different directions (Exhibit 2).
A table of statistics compares women’s and men’s careers. First, two measures show that women accumulated less experience, with men taking fewer total days of breaks (359 versus 509) between roles, and men working more hours per week (40.6 versus 37.8). Second, three measures show that women and men experienced similar career moves, making about 2.6 role moves, moving to a new organization about 78 percent of the time, and demonstrating a skill distance of 42 to 44 percent. And third, two measures show that women ended up in top-paying occupations at a lower rate, with a smaller share (32 versus 46 percent) moving to the top quintile, and a smaller share (3 versus 6 percent) in C-suite positions.
Women tend to take more frequent and longer career breaks than men
The arc of work experience can be relatively smooth. But frequently, it involves stops and starts as people go about their personal lives alongside their careers, taking breaks to juggle work and nonwork priorities. We added up all the self-reported career breaks in our data set, looking at the directional patterns.
We found that both men and women in our sample reported taking career breaks, defined here as a gap of one month or more between role moves. Perhaps unsurprisingly, women took breaks more often than men did, with as much as an eight-percentage-point difference in how often breaks occurred relative to all role moves at an estimated age of 37 years. With every break, women also spent more days out of the workforce, averaging an extra four months off per break.
Women’s career breaks are most apparent during their child-rearing years, likely linked to maternity leaves as well as caring for young and school-age children. The women in our sample with lower educational levels tended to take longer breaks from paid work compared with those with advanced degrees. Looking at other research, we infer that this may be due to the cost of care, which can be prohibitively expensive for lower wage earners in the United States, or perhaps related to the higher incidence of nonmarital childbearing among people without college degrees. Notably, we also see women taking breaks beyond their child-rearing years, at rates consistently higher than for men.
Women gain 14 percent less work experience over time
Household responsibilities are beyond the scope of our current study, but other research finds that male and female household members tend to allocate time differently on a daily and weekly basis. For example, one long-term study of fathers and mothers concluded that the proportion of time dedicated to paid work by fathers in the US workforce decreased from 42 hours per week in 1965 to 37 hours in 2011. Mothers increased their time spent in paid work from eight to 21 hours per week over the same period. Although fathers allocated some of this time away from work toward caregiving and household responsibilities, averaging about 17 hours per week in 2011, they still fell significantly short of the approximately 31 hours that mothers dedicated to these activities, according to the study.
Overall, in 2022, working women clocked 7 percent less time on paid work compared with men. This divergence is a combination of two factors: women hold a larger share of part-time jobs and work slightly shorter workweeks in their full-time jobs. (Of course, it’s important to remember that these are aggregate numbers; we also see women leaning in with more-than-full-time jobs and men taking on part-time roles.) Along with their career breaks—women take 42 percent more days on breaks than men over the course of a decade—we estimate that women accrued just 8.6 years of work experience compared with ten years for men, a 14-percentage-point gap in accumulated work experience.
The loss of work experience arising from both part-time work and career breaks could affect women’s promotions and pay in ways that compound over time. Based on career progression patterns in our database, we estimate that the differences in skills acquired by women compared with men through work experience account for $400,000 of their $500,000 earnings difference over a career.
Women are as likely as men to move into new roles, and they traverse similar skill distances
Despite accumulating less work experience in terms of time, women in our sample changed jobs at a pace similar to that of men after their first roles. Both men and women took on new roles, either within the same organization or at a different one, at a similar rate—an average of about 2.6 times over the ten-year period examined. For women and men alike, about 80 percent of role changes involved moving into new occupations and new organizations.
Based on our review of job postings, role moves typically come with new skill requirements. The share of new skills acquired and deployed that go beyond those exhibited in a prior role is what we refer to as “skill distance.” To be clear, traversing skill distance can happen when moving to a higher-paying job, a lateral position, or even a lower-paying job. If a computer programmer becomes a taxi driver, new skills are required.
In our analysis, women and men traversed similar degrees of skill distance in their career trajectories—another interesting similarity. More specifically, for both women and men, an average of 40 percent of the skills needed for a new job were different from those required in previous roles. Not only did women expand their skill sets with each new role as much as men in our sample, they also moved into new posts as early in their careers as men did. At least as reflected in these data, women are no more reluctant than men to enter unfamiliar career territory.
Men are about 1.5 times more likely than women to reach top-paying occupations
Even when workers traverse similar skill distances, not all job changes translate into better wages. For example, someone who started her career as an accountant might acquire new skills taking on an auditor role without a bigger paycheck—or become a financial manager and climb into a whole new income bracket.
Despite evidence of similar levels of willingness to try new roles, when men change occupations, we found that they are more likely than women to move to new occupations where the average pay is higher. When women change occupations, they are more likely than men to go into lower-paying fields. Of course, this trend reflects averages: There are men who fall behind and women who accelerate their earnings. In our sample, 20 percent of men moved into lower-paying occupations over ten years, while 33 percent of women advanced into higher-paying occupations during the same period. Outside our sample, which we have noted is overweighted with white-collar jobs and follows only the career pathways of people who remain in the workforce, other researchers have noted that some men without college degrees are dropping out of the workforce altogether, citing health reasons. In fact, while the median weekly earnings of all Americans increased over the past 40 years, the wages of men who did not go to college declined.
Based on the income-level averages of the occupations of individuals in our sample, we group them into quintiles at the start of their careers and at year ten. That helps us observe a general pattern that holds across all five quintiles: men often climbed up through the quintiles into higher-paying occupations, while women were more likely than men to descend to lower-paying occupations by the tenth year. This might be because women are potentially overrepresented in the lower salary ranges within each quintile, given that they generally earn less than men on average within each occupation (a topic we explore in more detail in the next section).
Although half of the women in lower quintiles in our sample moved into higher-earning salary segments, they didn’t reach the top quintile as often as men. Considering men in our sample who started in an occupation in any income quintile excluding the top one, roughly 45 percent of them moved into top-quintile occupations over ten years, compared with only about 30 percent of women. That means men were about 1.5 times more likely than women to reach the top quintile, no matter what rung of the income ladder they started on.
Take our example of accountants, a second-quintile occupation: 46 percent of men who began as accountants had advanced to top-quintile occupations like financial managers by year ten, while 35 percent of women did so. Conversely, 5 percent of men transitioned to lower-quintile occupations like auditing clerks, compared with 10 percent of women.
Even when men and women move into the same occupation, slightly more men tend to hold higher-paying senior roles than women. In our sample, 3 percent of all women occupied the C-suite, compared with 6 percent of men, and 44 percent of women were managers, compared with 48 percent of men.
Pay isn’t everything, but it reflects the value realized from human capital. Women’s careers, even highly credentialed ones, tend to plateau when compared with men’s—and this translates into a pay gap over time. We investigate the link in the following section.
Diverging work experience patterns drive nearly 80 percent of the gender pay gap
The many choices that women and men make over time lead to career arcs of decidedly different shapes. There are almost as many career trajectories as there are people in our sample. But looking at aggregate views, a few patterns stand out. While women earn more undergraduate and advanced degrees and start out strong, their career trajectories generally are flatter than men’s over time. Meanwhile, regardless of where men start out, they are more likely on average to climb into jobs that are more highly valued in the labor market.
Women are more represented in lower-paying occupations, on aggregate, and tend to earn less within any given occupation
Focusing on the overall US workforce in 2022 rather than our sample, higher-paying occupations tend to have more male representation than lower-paying ones. There are exceptions, from female majorities in high-paying radiology jobs to male majorities in low-paying bricklaying work. Yet grouped by occupational pay brackets, women in the US workforce hold almost 60 percent of the jobs in the very lowest bracket, which includes retail salespeople and assistants.
When considering total wages within occupations, women on aggregate tend to earn less than men within almost all job categories tracked, from hourly workers like retail salespeople to top-paying occupations like financial managers. Of course, many factors, including role-level seniority and tenure, can influence pay variations within occupations, as we discuss in the next section. That said, the occupational overview reveals a gendered pattern that indicates a 27 percent pay gap.
Women with higher pay gaps tend to choose jobs with less competitive demands and more flexibility
Not all starting points led to pay gaps for women in our sample, although the vast majority did. Some starting occupations—compliance officers or travel agents, for example—led to ten-year career paths where women ended up outearning men who started in the same occupation. Some 10 percent of women were on these “pay premium” trajectories. However, more than half the women in our sample experienced large ten-year pay gaps due to their occupational trajectories. Examples include those starting out as medical assistants or nurses.
Among measurable traits, two workplace characteristics defined by O*NET stood out as significant factors differentiating men’s and women’s trajectories: workplace competition and flexibility. The workplace competition score quantifies the extent to which jobs require workers to compete or be aware of competitive pressures, such as commission-based work for real estate agents. The flexibility score measures the “full-time nature” of an occupation, represented by the proportion of all workers in an occupation who are employed full time.
We identified three starting occupation cohorts: those where women’s career paths lead to significant pay gaps compared with men, those resulting in moderate pay gaps, and those leading to pay premiums. We found that, on average, workers starting in all three cohorts ended up in occupations ten years later in which the full-time and competition scores were lower for women than for men, on average.
Women generally moved to occupations with lower workplace competition and more flexible work arrangements, and this was pronounced in trajectories leading to larger pay gaps. For example, consider the starting occupation of a brokerage clerk, in which men ultimately significantly outearn women over time. Women starting as brokers often seek roles like credit counselors, which have lower competition and full-time scores. In contrast, men starting as brokers tend to become investment fund managers more often, entering highly competitive environments.
Some examples illustrate diverging career trajectories within occupations
We illustrate diverging career trajectories with examples drawn from the men and women who began their careers as tech professionals and went on to follow different paths. Here we group tech professionals into three subgroups: tech managers, tech engineers, and tech support. Overall, women make up about one-quarter of the workforce employed as tech professionals and experience a lower-than-average 23 percent pay gap. Yet they were more likely than men to leave this field, and when they left, more of them typically moved into lower-paying occupations.
Among the women who started out as tech managers, for example, only about one-third remained in the tech profession, compared with half of all men. Specifically, just 6 percent of women continued as tech managers, while 16 percent of men did. Among the women who left, about half transitioned to similarly high-paying roles, for example, marketing managers, while the rest moved to lower-paying positions, for example, community service managers. In contrast, of the men who exited tech, three-fifths (29 percent out of the 50 percent) shifted to other high-paying occupations.
Similarly, only about 40 percent of women who began their careers as tech support staff stayed in the tech field, compared with 60 percent of men. Among those who stayed in tech, a slightly higher proportion of women than men advanced to better-paying tech positions like engineers and managers. However, 40 percent of women who left tech (or 24 percent of all women) left for lower-paying occupations like customer service representatives, while only one-third of the men (or 12 percent of all men) did so.
Other examples also illustrate this trend. In the sidebar, we present two occupations currently dominated by women—nurses and office support—and another two similar to tech with male majorities—managers and production workers. Two of these are growing, as tech is—nurses and managers—and two are shrinking—office support and production workers. (See sidebar “Diverging career trajectories among managers, nurses, office support, and production workers.”)
Fewer women are moving into occupations that are projected to grow, but some employers are altering this trend
The mix of occupations needed by America’s economy is evolving. Demand for workers in some fields—notably, healthcare, technology, and management—is expected to grow through 2030 as adoption of automation and AI technologies accelerates, while some roles in office support and production work will disappear in aggregate by then, according to previous MGI research. Millions of US workers will likely need to transition out of “shrinking” fields of work into “growing” ones.
Today, women are not only less concentrated in growing occupations but also less likely than men to move into them
Despite their outsize presence in growing healthcare occupations, women are underrepresented in growing occupations overall. Only 59 percent of women are in these occupations, compared with 67 percent of men. Conversely, women are overrepresented in shrinking occupations.
Looking back, we also see that women moved into and remained in growing occupations less often than men in our sample. Women accounted for just 42 percent of the workers who transitioned from shrinking occupations to growing ones or stayed back in growing occupations over time.
For example, historically, more women than men have moved into healthcare, a fast-growing occupational group, and into creative and education industries, which are expected to grow more modestly. The question of why more men don’t enter these high-growth “pink-collar” occupations as often as women is also something to consider. At the same time, women are underrepresented by a wide margin among workers moving into fast-growing STEM jobs and management roles.
Employers can be expected to adjust wages and work arrangements to meet their future demands, providing an incentive for qualified individuals to move into growing occupations, as they have in the past. For example, in 2022, 18 percent of women in the workforce were in management fields, up from 15 percent in 2012. Similarly, the share of men in these fields increased, albeit at a slower pace, from 17 percent to 19 percent. Conversely, in shrinking fields like office and administrative support, the concentration of women decreased from 19 percent to 16 percent, while the share of men declined from 6 percent to 5 percent.
Overall, historical patterns suggest that women’s current underrepresentation in growing occupations could become even more pronounced over time. That is, while the proportion of women working in growing segments could rise to nearly two-thirds by 2030, the proportion of men could increase more rapidly so that more than three-fourths of them are working in growing segments by then. The disproportionate presence of men in growing and higher-paying occupations, coupled with the overrepresentation of women in shrinking occupations, could cause the pay gap to stay the same or increase over time.
Some employers have facilitated movement to growing occupations for all employees while also reducing the gender pay gap
Some companies are at the forefront of building human capital for all workers, both men and women, while at the same time delivering top-tier financial performance. We labeled those employers People + Performance Winners (P+P Winners) in previous research. In that research, we found that employees who pass through P+P companies go on to have higher lifetime earnings on average than those who did not. (See sidebar “What are ‘People + Performance Winners’ and what might they show us?”)
Now, we build a gender-disaggregated view for 12,000 career histories spanning 1,100 US-based employers. We find that, adjusting for industry mix, women who passed through the halls of P+P Winners at any time in the first ten years of their careers ended up with higher average salaries and lower gender pay gaps than those who had passed through People-Focused Companies, Performance-Driven Companies, or Typical Performers. Although these are correlations and we cannot directly ascertain the causes, we found that, on average, both men and women who worked for P+P Winners moved more often into growing occupations, experienced more internal role moves, and had longer tenures at the company. In our analysis, we did not find higher women’s representation in P+P Winners per se; instead, we identified a strong emphasis on both expecting and facilitating skills development for all employees, including women.
Importantly, P+P Winners provide workers with clear organizational vision, translated for the specific contexts of individual teams and roles. They offer a performance culture with transparent expectations and incentives that challenges employees while empowering them, as well as a focus on innovation that encourages risk-taking with appropriate coaching. By contrast, People-Focused Companies excel on human capital development measures like internal rotation and training but lack P+P Winners’ performance-oriented culture, while Performance-Driven Companies focus on defined performance goals, efficiency, and a strong external orientation rather than empowering employees. The distinctive organizational culture of P+P Winners offers lessons to employers intensifying efforts to attract talent and reskill workers given trends expected for the future of work.
Drawing from the P+P Winner advantages observed in our study samples, some broad ideas stand out that could be useful to other employers. P+P Winners cultivate internal mobility opportunities that can build skills and retain talent. They also target training and apprenticeship programs, especially for midcareer talent. Other evidence documents the promise in these approaches. For example, skill-enhancing opportunities within organizations have increased employee satisfaction and retention. According to LinkedIn’s Global Talent Trends 2020 research, employees tend to remain at a company 41 percent longer if the company regularly promotes from within. And a recent Gallup survey suggests that midlevel and mid-tenure employees, who constitute the majority in most organizations, would benefit from targeted training and development programs. As labor markets remain tight amid demographic shifts, employers should keep in mind that workers will have more options in choosing their work and choosing their employer. Both men and women can, and will, make strategic career moves that help them grow. Each individual’s choice is their own, but employers can do more to position themselves for this future.
A person’s first job is just the first step in a long journey. Work experience matters and defines the quality of workers’ career arcs as well as their pay. Gender pay gaps that grow over time reflect different choices made by men and women in utilizing and building their human capital. Companies can influence those choices by fostering organizational cultures that emphasize role mobility and skill building for all workers, ensuring that both women and men realize more value from their human capital over their careers at the same time that they prepare for the future of work.
