The term 'pay gap' refers to an unfair or undesirable difference in pay between two different groups of people. An often cited example is the gender pay gap between women and men.
Polling alumni from more than 60 elite MBA programs across the US, Europe, and Canada, the Forté biennial study found that while earning an MBA leads to a significant pay hike for all graduates, a gender pay gap exists with women on average experiencing a smaller increase in salary than their male cohorts. The study also highlighted pay gaps affecting students from minority groups.
To find out what steps businesses and business schools can take to narrow these gaps and build a more financially equitable future for everyone, we spoke with business school professionals and Forté Foundation CEO, Elissa Sangster.
The MBA gender pay gap: New findings
Gender pay gap persists for female MBAs
In the 2025 MBA Outcomes Report, the Forté Foundation examined pay disparities among MBA graduates, revealing that women continue to experience a pay gap when compared with their male counterparts.
The study revealed women’s salaries rose by 52% on average in their first jobs post-MBA, reaching just over $131,000, however, men’s salaries surged by 73% to reach just over $140,000—a 21% difference. This gap has remained stagnant over the past two years, according to the report.
Professor Shumaila Yousafzai from the Nazarbayev University Graduate School of Business, feels this gender pay gap is frustrating, yet unsurprising.
“As someone in academia, I’ve seen this firsthand: despite holding the same or even stronger qualifications and publication records, women professors often earn less than their male counterparts," she says.
“The gender pay gap is not simply about individual performance or negotiation—it is a reflection of deeply embedded systemic inequities. The fact that women with MBAs still earn significantly less than men reveals how even at the highest levels of professional education, institutional bias continues to shape outcomes.”
Gender pay gap persists for minority MBAs
The report also found that MBA graduates from under-represented minorities (URM)—defined as Black, African American, Hispanic or Latin American, Native American, or a combination of these communities—continue to face a pay gap when compared with those from well-represented communities.
For men this difference was relatively small: non-URM men saw the biggest pay hike within the report, with an average salary increase after graduating of 74% compared with their last pre-MBA job. Meanwhile URM men saw a 72% increase.
However, for URM women, the gender pay gap was more prominent as they earned smaller salaries on average ($128,000) than non-URM women ($132,000). This was despite experiencing greater average pay increases, with salaries rising by 57% for URM women in their first post-MBA job, compared with 51% for non-URM women.
“This [data] clearly demonstrates that education and achievement alone do not guarantee pay equity,” says Shumaila.
Pay gap widens over time for minorities and women
According to Forté, both women and minorities face ageism within the workplace, meaning they are discriminated against or treated unfairly because of their age. This is reflected in widening pay disparities as their careers progress: the survey revealed the gender pay gap started at 6% in the average female respondent's first post-MBA job but expanded dramatically to 17% by the time they reached their current role. This percentage has remained unchanged since 2021.
Earlier this year, the Gender Pay Gap Report (GPGR) by Payscale revealed similar findings, highlighting that women aged 20 to 29 earn $0.86 for every $1 earned by men, while by age 45, this drops to just $0.72 for every $1 men earn.
The pay gap between non-URM and URM men grows similarly over time. Non-URM men see the largest percentage increase among all groups after graduating from their MBAs, with an average salary rise of 178% from over $79,000 in their last pre-MBA jobs to an impressive $220,000 in their current roles today. Meanwhile, URM men experience a 150% increase, from $83,000 to just over $209,000, marking a 28% difference in growth between the two groups.
Among survey respondents, URM women’s salaries climbed 114% between their last pre-MBA roles and their current jobs, from $81,000 to $175,000. Meanwhile, non-URM women, who had the highest pre-MBA salaries of any group, saw a 107% increase from $87,000 before enrolling to $181,000 in their current roles. Despite seeing a greater pay increase, URM women still earn the lowest salaries overall.
For Esha Mendiratta, associate professor of International Business at Vlerick Business School, the disproportionate impact on the salaries of all women can be partially explained by the ‘motherhood penalty’: which highlights that women are financially penalized by employers for having children, while men are not.
“Family responsibilities and the motherhood penalty might be an explanation for this. Biases in the workplace could also be another,” she explains.
Disparities in salary increase between pre and post-MBA
Unequal playing fields in leadership and career advancement
The Forté report also revealed persistent gaps in outcomes for women and minorities as their careers progressed.
For every 2.3 men who received a promotion, only 1.4 women were promoted. This gap widened between 2023 and 2025, when the last report was published. Non-URM women experienced the largest decline in promotions (from 1.8 in 2023 to 1.4 in 2025) followed by URM women, whose promotions decreased from 1.5 to 1.4. Meanwhile URM men saw the largest increase in promotions (1.8 in 2023 to 2.1 in 2025) and non-URM men saw an increase from 2.3 to 2.4.
Likewise, men were found to be closer in rank to becoming CEOs than women—3.8 levels away on average compared to 4.3 for women.
The report also found the average man manages a larger budget than their female counterpart, with men twice as likely to manage budgets of $50 million or more (12% of men versus 6% of women). Additionally, more than half (53%) of men said they manage a budget, compared to 45% of women.
Disparities in promotions and responsibilities suggest that entrenched barriers continue to mould the careers of women and minorities at the advantage of men and well-represented ethnic groups.
Barriers to advancement: Sponsorship and career planning
The Forté Foundation identified a lack of sponsorship and formal career development plans as key factors driving pay gaps for minorities and women. Again, since the last report, these barriers have escalated.
Among non-URM women, 43% stated that lack of sponsorship was the main obstacle to their advancement, a 10% increase from 2023. URM men and women also cited this as a significant barrier, at 40% and 35% respectively. By contrast, non-URM men remained unchanged at 25% in both 2025 and 2023, highlighting that women and minorities are at a disadvantage.
A lack of formal career development plans was also cited as a major obstacle to career progression. URM men cited this as their biggest barrier, with 63% identifying this issue in 2025 (up from 44% in 2023). URM and non-URM women followed closely at 53%.
Without sponsors to advocate for their advancement, formal development plans, or mentorship, women and minority groups find themselves struggling to get on the path to leadership, the report shows.
MBA graduates citing lack of sponsorship as career development barrier
5 Ways business schools and employers can close pay gaps
While the report highlights several clear areas for concern, with the assistance of business schools and employers, experts say pay gaps for women and minorities can be narrowed, and perhaps even closed.
They suggest five key methods to achieve this.
1. Increase transparency in pay
Promoting pay transparency—the practice of openly sharing salary information within an organization—is widely recognized as one of the most effective ways to tackle pay disparities. With clear evidence of unfair pay practices, women and minorities are better equipped to address injustices and help level the playing field for themselves and others.
However, pay transparency can sometimes lead to unintended consequences, such as low morale, unhealthy peer comparisons, or even lowering of average salaries. To navigate this, Esha from Vlerick Business School recommends alternative forms of transparency.
“Employers could use vertical pay transparency policies—which allow workers to access information about what they could earn if promoted—to encourage increased effort and productivity, especially if the root cause of the pay gap is that women and minorities are not raising their hands for promotion,” she says.
Elissa Sangster, CEO of the Forté Foundation, adds that pay transparency alone isn’t enough: “Employers need to ask themselves, ‘Is there equity in promotions, budget responsibility, the number of people managed, plus how many levels away a person is from a C-suite role? And what’s being done to build that pipeline?'
"If companies want to move the needle on inclusion for advancement, those four factors are the new frontier,” she adds.
2. Encourage diversity in high-paying specializations
Addressing occupational segregation is another key part of resolving pay gaps among women and minority MBA graduates.
“Business schools should actively encourage and support women and underrepresented minorities to enter high-paying specializations, such as finance, consulting, and STEM-related fields,” says Esha.
“If individual schools find that indeed, women are opting for different specializations relative to men in a systematic way, understanding the root cause and using formal (e.g., scholarships) and informal (e.g., alumni mentorship) mechanisms to encourage both men and women to make choices based on their motivations and skills seems important,” she adds.
With the backing of their business school, women and underrepresented minorities could feel empowered to enter more diverse spaces, resulting in higher salaries and greater opportunities.
3. Implement sponsorship and mentorship programs
As the Forté report revealed, one of the greatest barriers facing female and minority MBAs today is the lack of sponsorship and formal mentorship opportunities available to them. Without these opportunities, both women and underrepresented minorities feel unsupported, lacking clear routes to advance in their careers.
For Elissa, both business schools and employers need to make significant changes in this area to ensure that women and underrepresented minorities have access to much-desired leadership roles.
“Business school career services could proactively ask employers to include information on career development programs at their companies, tied to opportunities to work there for MBA graduates. Organizations, on the other hand, should work with their employees to create one, three, and five-year career development plans and focus more on sponsorship programs, ensuring there is equity in participation,” she suggests.
4. Integrate equity and inclusion frameworks throughout the curriculum
To equip students with the skills and mindset required to navigate the workforce—and to shape it into a fairer, more equitable landscape—business schools should integrate equity and inclusion frameworks throughout their curricula.
“It should not be an elective or afterthought. It should be mandatory for students to critically engage with how gender, race, and class shape leadership, decision-making, and organizational life,” says Julie Rosborough, deputy head of Postgraduate Education and MBA course director at Nottingham Business School.
5. Support family-friendly and flexible work policies
To prevent the persistence of the ‘motherhood penalty’ and the pay gap between men and women, Esha also calls for employers to increase their support for family-friendly, flexible work policies, allowing women to balance caregiving responsibilities more effectively.
“Both schools and employers should support family-friendly policies, such as parental leave, flexible work, and re-entry programs. These reduce career interruptions that disproportionately affect women and help mitigate long-term pay penalties.”
Bonus point: Stay proactive
The onus to fix pay disparities should not fall on women or minorities alone, as Shumaila highlights: “Women don’t need to be fixed—they don’t lack ambition or ability. The institutions do.”
That said, for MBA graduates seeking ways to help reduce the pay gap for women and minorities, perhaps the greatest way to do so is simply by staying proactive.
“MBA alumni need to keep comparing employers and asking them questions throughout their careers—not only in their first post-MBA job," says Elissa.
“Always ask if a company has written guidelines on reaching the next level, including a career plan to get there, and if sponsorship programs are available to all employees to help them advance. If they don’t have a sponsorship program, ask how they position their people for success by aligning them with a mentor outside their direct manager."
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