Examining the Gender Pay Gap Among Financial Planning Professionals: A Blinder-Oaxaca Decomposition

31 Pages Posted: 6 Nov 2019

See all articles by Derek Tharp

Derek Tharp

University of Southern Maine

Meghaan Lurtz

Kansas State University - School of Family Studies and Human Services

Kate Mielitz

Oklahoma State University

Michael Kitces

The Kitces Report & Nerd's Eye View; Pinnacle Advisory Group

D. Allen Ammerman

West Texas A&M University

Date Written: February 12, 2019

Abstract

The financial planning industry has been identified as having one of the largest gender pay gaps. This study examines whether male and female financial planners receive equal pay for equal work. Using detailed data on the backgrounds and practices of 710 financial planners, an unadjusted pay gap of 19% was observed between male and female financial planners. Blinder-Oaxaca decomposition analysis suggests that 91% of this pay gap can be explained by a model accounting for differences in important individual characteristics including job role, experience, team structure, hours worked, revenue produced, professional designation status, marital status, and psychological factors such as degree of motivation by income potential, performance pay, work-life balance, and stable pay; resulting in an unexplained pay gap of 1.8%. Degree of motivation by performance pay and revenue production explained the largest portions of the pay gap. Implications regarding gender-based discrimination in financial planning are discussed.

Keywords: gender pay gap, wage gap, financial planners, financial advisors, brokers

JEL Classification: J71, G23

Suggested Citation

Tharp, Derek and Lurtz, Meghaan and Mielitz, Kate and Kitces, Michael and Ammerman, D. Allen, Examining the Gender Pay Gap Among Financial Planning Professionals: A Blinder-Oaxaca Decomposition (February 12, 2019). Available at SSRN: https://ssrn.com/abstract=3333387 or http://dx.doi.org/10.2139/ssrn.3333387

Derek Tharp (Contact Author)

University of Southern Maine ( email )

P.O. Box 9300
Portland, ME 04104-9300
United States

Meghaan Lurtz

Kansas State University - School of Family Studies and Human Services ( email )

KS
United States

Kate Mielitz

Oklahoma State University ( email )

Stillwater, OK 74078-0555
United States
405-744-6052 (Phone)

Michael Kitces

The Kitces Report & Nerd's Eye View ( email )

P.O. Box 2231
Reston, VA 20195
United States
703-375-9478 (Phone)

HOME PAGE: http://www.kitces.com/

Pinnacle Advisory Group ( email )

6345 Woodside Court, Suite 100
Columbia, MD 21046
United States
410-995-6630 (Phone)

HOME PAGE: http://www.pinnacleadvisory.com

D. Allen Ammerman

West Texas A&M University ( email )

Canyon, TX 79016
United States

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