NPR’s Morning Edition aired a story yesterday morning by Planet Money reporter Lisa Chow entitled “Why Women (Like Me) Choose Lower-Paying Jobs.” The key findings that sparked Ms. Chow’s report were that,

  1. Women were underrepresented in the most lucrative majors (i.e. engineering) and overrepresented in the less lucrative majors (i.e. psychology, art), and
  2. Women in the lucrative majors ended up picking careers that were less lucrative anyway (i.e. education).

Why do women do that? Central to the piece was an interview with a college career counselor, Rhea Faniel, who

had a degree in accounting and started her career in the corporate world. She was making good money, moving up in her company. One day, her boss came to her and said he wanted to groom her to be a director.

“I knew what that entailed,” she says. “Taking up more responsibility, taking up other classes and training, and here i was, I was five months pregnant. He didn’t even know it.”

Faniel thanked her boss but told him she was more focused on having a baby. Her focus on her family eventually led her to leave the corporate world. Other women, she says, are put off by companies with male-dominated cultures.

Ms. Faniel had another observation, one that has since become somewhat common sense and a rallying cry for women in the workplace with the release of Anne-Marie Slaughter’s “Why Women Still Can’t Have It All“: “I think you have to look at the role of women in the United States and the bottom line is beyond their work, they’re trying to manage children, homework schedules, a home, its stressful.”

Whether in a developed country such as the United States or in the low-income neighborhoods of Colombia, women are constantly making income decisions based on a social and cultural default that they are responsible for children and the household. Some initial findings from our ongoing research in Colombia found that women often choose home-based businesses instead of finding formal employment to ensure ‘peace’ in the household. In Malawi, one of the rural women we interviewed identified herself first and foremost as a farmer (unlike in other countries where women often identify themselves with their domestic responsibilities such as cleaning and childcare) and told us about how she starts her day at the crack of dawn and works all day in the fields with her husband. But alas, when the day ends, she still has to clean the house and watch the children. This Malawi woman sure is trying to have it all, but her days are extremely long and she is very, very tired. Sound familiar?

A culture that  encourages women to pursue jobs or businesses that are beneath their potential is harmful not just for women and their families; it’s harmful for the economy. Women’s World Banking believes in women’s potential not only as financial services clients but also as talent. Having more women in the workforce leads to gender diversity, which we know leads to strong decision-making and healthier, more vibrant organizations. So, providing a workplace environment that welcomes women and encourages them to stay means capitalizing on a lucrative human resource – this should be a no-brainer for institutions, financial or otherwise.

Workplace environments that discourage retention of women staff has been a problem in the microfinance industry for many years. This is especially problematic for an industry that serves a majority of women clients–clients who often speak of the inspiration they derive from seeing powerful women leaders in the organizations that serve them. In response to this, Women’s World Banking designed the Organizational Gender Assessment (OGA) in 2008, drawing on best practices from both the corporate and development sectors, including the Women’s World Banking network. The OGA helps financial institutions diagnose the obstacles, challenges and opportunities faced by women staff members and leaders, eliminate those obstacles and create an inclusive work environment for all. In just the past year, we have conducted two OGAs (in Uganda and Tajikistan) which have confirmed what we know at Women’s World Banking: that there is a clear link between becoming the provider of choice for women and the employer of choice for women.  In addition, we worked with some of our network members to develop among others, criteria to measure an institution’s commitment to gender diversity. When workplace conditions accommodate women’s needs and they are satisfied with their jobs, women often exhibit lower attrition and higher productivity. Indeed, we found at Fundacion delamujer (Colombia), an institution committed to building a strong, gender diverse organization, that women’s voluntary attrition rates were 10 percentage points lower than men’s and that women loan officers who had stayed longer on the job exhibited higher levels of productivity.

Women all over the world face pressure on all sides to make employment decisions that may not be the best for them, a decision that translates into a loss for the economy at large. Women reaching and excelling beyond their hiring potential without sacrificing their duty as wives and mothers is not only possible, but it makes good financial sense. If we are serious about empowering women and kick-starting the global economy, companies, organizations and institutions must do better to attract and retain women staff. For a woman to actively choose a low-paying job—that should be a thing of the past.