Tough trade-offs: How time and career choices shape the gender pay gap

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.¹We acknowledge that measuring career breaks can be prone to errors because not all breaks are explicitly reported in online work histories, especially when a person returns to the same role afterward. We want to emphasize that we look at directional patterns in this analysis and that figures (the numbers of breaks and the total time spent off work) are probably too low because breaks are underreported.

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.²Note that the data set we worked with did not reveal whether individuals in the sample had children. Childrearing years are generally considered to span ages 25 and 50. In the United States, the average age of first-time mothers is 27, and they are typically seen as rearing a child till the child turns 18. See Katherine Schaeffer and Carolina Aragão, Key facts about moms in the U.S., Pew Research Center, May 2023. The women in our sample with lower educational levels tended to take longer breaks from paid work compared with those with advanced degrees.³In our sample, women with only a high school degree took 565 days of break from paid work over ten years, on average, compared with 390 days for women with bachelor’s degrees and 378 days for women with doctorates. 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.⁴Georgia Poyatzis and Gretchen Livingston, “New data: Childcare costs remain an almost prohibitive expense,” US Department of Labor Blog, November 19, 2024; and Shelly Lundberg, Robert A. Pollak, and Jenna Stearns, “Family inequality: Diverging patterns in marriage, cohabitation, and childbearing,” Journal of Economic Perspectives, volume 30, number 2, spring 2016. Notably, we also see women taking breaks beyond their child-rearing years, at rates consistently higher than for men.

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.¹“American Time Use Survey: 2023 results,” US Bureau of Labor Statistics, June 2024. 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 2011.² Kim Parker and Wendy Wang, “How mothers and fathers spend their time,” in Modern parenthood: Roles of moms and dads converge as they balance work and family, Pew Research Center, March 2013. 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.³Average weekly working hours were self-reported for part-time and full-time workers in 2022 as part of the US Census Bureau’s American Community Survey. 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.)⁴For example, among full-time workers, women surgeons report working more hours than men. In the childcare-worker occupation, there are more men working part time than women. 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.⁵Based on methodology established in previous MGI research on human capital. Entry-level skills account for the remaining portion of lifetime earnings. See “Human capital at work: The value of experience,” McKinsey Global Institute, June 2022.

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.¹“Human capital at work: the value of experience,” McKinsey Global Institute, June 2022. 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.²Other research has suggested that women are—or are perceived to be—more risk averse than men and may particularly avoid risk under stress. See, for example, Christie Hunter Arscott, “Why women should make bold moves early in their careers,” Harvard Business Review, July 2022; Doug Sundheim, “Do women take as many risks as men?,” Harvard Business Review, February 2013; M. Mather and N.R. Lighthall, “Risk and reward are processed differently in decisions made under stress,” Current Directions in Psychological Science, volume 21, number 1, 2012; and S. Ball, C. Eckel, and M. Heracleous, “Risk aversion and physical prowess: prediction, choice and bias,” Journal of Risk and Uncertainty, volume 41, number 3, 2010. 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.

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.¹See, for example: “The state of working class men,” American Institute for Boys and Men, August 2024, which summarizes: “While the shift to a knowledge-based economy has blessed the more highly educated with strong and rising wages, working class men face dwindling job prospects, stagnant wages, and declining health”; Anne Case and Angus Deaton, Deaths of despair and the future of capitalism, Princeton University Press, 2020. 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.²“Quartiles and selected deciles of usual weekly earnings of full-time wage and salary workers by selected characteristics, not seasonally adjusted,” US Bureau of Labor Statistics, accessed January 17, 2025. For a discussion of this trend, see, for example, John Burn-Murdoch, “Young women are starting to leave men behind,” Financial Times, September 20, 2024.

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.³The income distribution observed here offers an important reminder that our sample is overweighted with higher-income workers: Note that 51 percent of men and 35 percent of women in our sample began their careers in top-earning occupations, while 18 percent of men and 10 percent of women in the workforce as a whole are in these top-earning occupations. 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.

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.

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.¹Including licensed practical nurses, licensed vocational nurses, and registered 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.²Homing in on these two characteristics follows our testing of several others measured by O*NET for more than 700 occupations. Our analysis showed that most of these factors had no significant bearing on pay gap related to career pathways. Apart from workplace competition and flexibility, the characteristics we tested include the physical movement required, time pressure, and decision-making freedom, among others. See, for example, “Occupational requirements,” O*NET, accessed January 17, 2025. 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.³Beyond measurable occupational traits, a study of German workers found that when heterosexual couples relocate geographically, the man’s earnings increase significantly, while women suffer substantial losses, suggesting another cause for trajectory gaps. See Lea Nassal and Marie Paul, “Couples, careers and spatial mobility,” Centre for Research and Analysis of Migration Discussion Paper Series, September 2022.

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.

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.

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.¹Alexia Delfino, “Breaking gender barriers: Experimental evidence on men in pink-collar jobs,” American Economic Review, volume 114, number 6, June 2024. 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.²If historical patterns of movement over the first ten years of a career by gender were to continue until 2030, only 12 percent of women in the workforce might be expected to transition from shrinking occupations to growing ones, compared with 16 percent of men. Additionally, just 48 percent of women might be expected to stay employed in growing occupations, compared with 59 percent of men. 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 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.¹“Performance through people: Transforming human capital into competitive advantage,” McKinsey Global Institute, February 2023. (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.²Note that our estimates for pay gap and average salary assume that occupational pay differences hold across companies. We do not factor in company-specific pay practices. 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.