Career Plans and Expectations of Young Women and Men: The Earnings Gap and Labor Force Participation

Using detailed information on the career plans and earnings expectations of college business school seniors, we test the hypothesis that women who plan to work intermittently choose jobs with lower rewards to work experience in return for lower penalties for labor force interruptions. We find that while men and women expect similar starting salaries, women anticipate considerably lower earnings in subsequent years, even under the assumption of continuous employment after leaving school. While it is also true that women in the sample plan to work fewer years than men, these differences do not explain the observed gender differences in expected earnings profiles. We also find no evidence that gender differences in expected earnings have any effect on the number of years these women plan to be in the labor market.