Study indicates that women work more and earn less in finance

“We can see that women work more and are paid less compared to men in the finance industry in Brazil.” This is one of the findings of a new study by Professor Claudia Yoshinaga, the coordinator of Fundação Getulio Vargas’ Finance Research Center (FGVcef). The study demonstrates how women are underrepresented in the Brazilian finance sector in terms of both positions and remuneration. The paper, which was published in the latest issue of the business journal GV-Executive, also suggests possible ways to change this situation. 

The study was based on a questionnaire filled out by 214 people who work in the finance industry, designed to shed light on the challenges for female participation in this area. Of the participants, 39.25% were women and 60.75% were men.

However, what really draws attention, according to Yoshinaga, is the fact that even though they are a minority in this field, the women who participated in the survey work around 60.4 hours a week on average, while men work 57.8 hours.

Women in financial careers

Data from the Official Monetary and Financial Institutions Forum (OMFIF), a think tank, indicates that women make up just 35% of board members at the world’s 50 largest commercial banks. In leadership positions, the rate is even lower, 19%, and only 16% of CEOs are women.

When it comes to finance, gender inequality in Brazil is even greater. Worldwide, women account for 18% of professionals with chartered financial analyst (CFA) certification, a key qualification for working in the financial markets, and in Brazil the figure is 11%.

The idea to research this topic came from a former FGV business student, Laura Gomes, who decided to investigate the presence of women in the financial markets after reading the book Wall Street Women.

“I was at the beginning of my career in the financial markets and I wanted to understand the trajectories of other women in this sector. This research was a comprehensive way of capturing the experiences, challenges and successes of these professionals and understanding, through the collected data, if their experiences are part of the dynamics of this industry. The study yielded lessons that have been valuable to me and I hope they will be useful to more women as they progress in their careers,” says Gomes.

This FGVcef study also looked at the university degrees that people in finance have. Among men and women participating in the survey, 63.55% have a degree in business administration, 14.95% in economics and 12.15% in engineering. This result is closely linked to one of Professor Yoshinaga’s biggest concerns – the presence of women among business administration students.

Although figures from the Brazilian Education Ministry’s National Institute for Educational Studies and Research (INEP) show growing female participation in administration programs, Yoshinaga has noticed a decline in this indicator in the last few years, in her experience. According to her, if we also look at other areas within the broad field of administration, such as finance, female participation has decreased even more.

“As a professor at Fundação Getulio Vargas’ Sao Paulo School of Business Administration (FGV EAESP), one of the leaders in its field in Brazil, I’ve noticed a reduction in the number of female students on our undergraduate program lately, and that worries me. We are considering ways to encourage more women to apply. However, first we need to think about how to make these environments more inviting,” says Yoshinaga, who is the first woman to coordinate FGV’s Finance Research Center.

Pay and professional growth

As well as holding fewer positions than men and being paid less, women also tend to face more difficulties in terms of professional growth in this sector. Out of the survey’s respondents, approximately 30% were analysts, 6.5% were interns, 13% associates, 15.9% managers, 7% superintendents, 8.4% directors, 2.8% vice presidents and 11% were partners.

Although roughly equal numbers of men and women are analysts, when it comes to higher positions, female participation drops dramatically, with women occupying only 7% of leadership positions. “Women are a minority in senior financial posts and they face a double glass ceiling, making it hard to reach managerial positions and higher-paying positions,” Yoshinaga says. 

In relation to pay, the study only found women in the lead in the highest positions, such as partner or director. In the other posts, from intern to superintendent, there were no women paid more than their male peers, especially in the analyst position, which has the most even distribution between genders.

Another type of inequality in this sector can be associated with certain parts of the finance industry. For example, men dominate asset management and they make up the majority of people in the commercial/sales, information technology and investment areas. 

“The only areas in which women are in the majority are those related to administrative and support functions, which account for 10.7% of the surveyed women in finance but just 5.4% of men,” the professor notes. In her view, this fact is related to long-term gender stereotypes, which have been perpetuated in society for generations, deterring women from entering science, technology, engineering and mathematics (STEM) fields.

Historical factors and social legacy

In this context, one part of the study sought to understand whether the mothers and fathers of people who work in finance obtained university degrees in STEM subjects. It was found that 30% of the fathers of those surveyed had STEM degrees, while that only applied to 11% of the mothers.

Yoshinaga argues that this is a significant finding, as there is evidence that the daughters of mothers trained in these areas are more likely to pursue a career in the exact sciences, inspired by this example from an early age. On the other hand, boys tend to grow up with a different mindset when faced with the same example.

According to the researcher, it is also necessary to consider that as well as going to work, many women often do domestic chores and look after children, among other responsibilities. “If we take all these factors into account, the disparity in hours worked between the two genders could be even greater,” she says.

She also recalls that in the past, women were linked to domestic tasks, and this perception still exists to this day, giving rise to the belief that women are less competent in the exact sciences. To illustrate how this prejudice is rooted in society, she gives some examples from the Portuguese language.

“In Portuguese, all the wealth that you accumulate in life in terms of money and material goods is called ‘patrimônio,’ [meaning net worth in English, but literally ‘patrimony’], while the female equivalent of this word, ‘matrimônio,’ means marriage or wedlock. The Portuguese language itself was conceived under the view that women are associated with domestic work and so aren’t able to manage finances,” she explains.

She says that this logic doesn’t make sense, as socioeconomic data indicates that most Brazilian households are now headed by women. 

“Many women are used to running a household, so why can’t they run a business? In the past, women could not work and as they were limited to marriage and did not earn their own money, they basically had nothing to manage, apart from the household. Now, many years on, women occupy many different spaces in the job market, but there is still a perverse cultural view that financial management is not for them,” she adds.

According to Yoshinaga, this historical and social background of women staying at home and the cultural perpetuation of this type of thinking are exacerbated by the fact that the labor market has unfavorable conditions for women. In her opinion, these factors increase women’s conviction that it is not possible to enter the finance area.

“Since childhood, girls are hindered by this cultural baggage. Although we have improved a lot in recent years, we must understand that this is about breaking the system in a transgenerational way. For this reason, one part of this project included research on the education of the mothers and fathers of finance professionals, so that we can measure how far we have advanced and where we are in terms of breaking these gender stereotypes,” she says, adding that the project also involved a literature review on the presence of women in the labor market. 

Transforming reality

Yoshinaga explains that for these cultural reasons, women can be deterred from pursuing a career in finance, and to combat this it is necessary to make this environment more inviting. “Showing our achievements and saying that we have a chance to change this situation are perhaps the initial steps,” she says. 

She adds that it is necessary to create public policies capable of strengthening women’s presence and growth in this area. “First, we need to encourage women to do finance-related degrees, offer specific slots for women and create transparent promotion and remuneration policies,” she suggests.

Other measures that could help change this situation include promoting institutional channels for reporting harassment, improving working conditions and disclosing more job and remuneration data in the finance sector broken down by gender. 

To read the full article, click here. You can also see the end-of-course paper that gave rise to this paper here. The study also involved a qualitative survey of 12 women, which looked at other issues about female space within the world of finance.