Higher Education Widens the Gender Wealth Gap: DOL

Data and insights from the Department of Labor’s Women’s Bureau can help advisors better understand and serve female clients.

|

“Education is the great equalizer,” according to American education reformer Horace Mann.

That may have been true back in the 19th century when Mann wrote it. But a new study published by the U.S. Department of Labor Women’s Bureau surprisingly finds that when it comes to men and women today, the opposite is true. Higher education only widens the wealth gap between the sexes.

“Among persons with advanced degrees, men’s wealth outpaces women’s wealth by 42% among bachelor’s degree holders and 53% among master’s, PhD and professional degree holders,” according to the study, “Women and Wealth.”

The study which focuses on women age 50 and over, is just one piece of a trove of information and analysis on women’s financial issues available on the Women’s Bureau website. Other recent releases include an analysis of regional pay disparities for women, a look at the gender wage gap 16 years after adoption of the Ledbetter Fair Pay Act, a blog on how to improve women’s retirement security in 2025, and a blog on the wage gap for women of color age 55+.

The study analyzes U.S. Census Bureau 2022-2023 Surveys of Income and Program Participation (SIPP) and defines wealth as an individual’s total assets minus liabilities. Assets considered include bank accounts, stocks and bonds, equity in primary residence, retirement accounts, and other assets such as equity in a business or real estate. All figures in the report are median values.

It was unclear whether the report’s analysis includes data on America’s wealthiest individuals. It’s an important factor that could potentially skew the comparison of wealth held by men and women. Women make up only 13% of Forbes’ 2024 list of the richest people. Rethinking65 asked the Department of Labor, but a spokesman said he could not immediately provide an answer because of the transition to the new administration.

Many of the insights shared in the study can help financial advisors better understand and serve their female clients.

A Pervasive Disparity

The Women and Wealth study examines the causes and effects of women’s lower earning power and wealth, particularly how they affect women’s retirement. The disparity remains pervasive despite decades of efforts to correct it.

“While the Equal Pay Act of 1963 improved the earnings of women relative to men by prohibiting wage discrimination on the basis of sex, six decades later women were paid 83 cents for every dollar paid to men,” writes the report’s author, Jeffrey Hayes, a survey statistician at the Women’s Bureau and a social science researcher.

While the gender wage gap narrowed substantially in the 1980s (when women began earning more bachelor’s and master’s degrees than men) and the 1990s, that wage gap momentum halted around 2000, Hayes writes. Additionally, women’s wealth-building is hampered by career breaks necessitated by family care responsibilities.

The report notes that the median wealth of women age 50 and over ($165,691) is just 77% of the median for men of the same age ($213,948). The report also broke out the 50-and-up category into smaller age brackets. Both men and women in subsequent decades report having more wealth, but the gender gap narrows with age.

Women age 50 to 61 report total wealth of $125,812, about 73% of the $171,898 reported by men. This percentage edges closer to but doesn’t hit 80% in later decades. From 62 to 69, when many people claim Social Security benefits, women report $173,682, vs. $222,879 for men. In the 70-and-older bracket, women report $205,503, vs, $261,506 for men.

Race and Education Disparities

The Women and Wealth report highlights another large disparity in income and wealth among women age 50+, based on race and ethnicity.

Within this age group, White women report total wealth of $214,201, nearly five times greater than Black women ($43,994) and more than four times greater than Hispanic women ($49,921). Women age 50+ of other race groups report $181,175, 85% of the figure for White women.

Of course, while higher education tends to increase the disparity in wealth between men and women, it substantially increases the earning power and wealth of both groups. Women 50 and older with some college education have median wealth that is about double that of those with high school education or less education — $153,179 vs. $67,820. Those with a bachelor’s degree report median earnings of $329,487, and those with postgraduate or professional degrees, $480,592. But the figures are progressively higher for men at each education level.

The disparity in wealth between men and women of all education levels and racial backgrounds has a variety of causes, according to the report. Included are wage inequality, family caregiving responsibilities that force women to take off time out of the labor market or work part-time, and lack of access to social protections that promote wealth building.

Lagging in Retirement Savings

Women also lag men in the component of wealth most closely associated with a successful retirement — retirement savings accounts. Among individuals 50 and older, only 45% of women have these accounts, compared with 51% of men. These women’s median retirement-account balance is $92,919 — the second second-highest component of their wealth, following equity in a primary residence. But that’s 60% less than the median retirement-account balance for men age 50+, $155,861.

Broken down further by age, the retirement account balance comparison is:

  • 50 to 61 years: men $134,608, women $80,650.
  • 62 to 69 years: men $177,384, women $102,704.
  • 70 and older: men $176,504, women $100,838.

Just as the earnings gap widens between men and women with higher education, men with higher education have significantly larger retirement accounts than women with the same education.

Here are the mean retirement account balances for men and women of different levels of educational attainment:

  • High school or less: men $72,842, women $44,826.
  • Some college and associate’s: men $101,746, women $69,872.
  • Bachelor’s: men $272,043, women $126,257.
  • Postgraduate and professional: men $364,231, women $172,832.

The wealth gender gap is also seen across all age groups for financial asset classes including bank accounts, equities and bonds, but the gap is biggest for women 50 and older. In the 50-61 age, women hold a median of $6,723 in these assets, compared with $9,303 for men. In the 70-and-above group, women have $13,930, vs. $19,345 for men. [The report didn’t break out the figures for ages 62-69.]

Lifelong Bachelorettes Beat Lifelong Bachelors

Older individuals — both men and women — have the highest median total wealth — $276,876 for men and $219,782 for women. Although people who have never been married have significantly less wealth than those who have married, older bachelorettes are in better financial shape than older bachelors, according to the report. Women over 50 who have never been married have higher median total wealth, $83,722, than men of that age who have never married, $65,333.

Never-married women 50+ are also more likely to have a retirement account than comparable men (45% vs. 38%). Yet their median retirement account balances are smaller than that of never-married men ($84,456 vs. $122,327). The same goes for formerly married women ($75,824) compared with formerly married men ($100,043) in this age group. Married women age 50+ have a much higher median retirement account balance ($102,442), yet it’s just 56% of the balance held by married men of this age ($182,806).

And since a 60-year-woman can expect to live more than three years longer than a man of 60, she also has to figure out how to further stretch her lower earnings and retirement savings, the Woman and Wealth report notes.

How to Fix It?

Hayes offers several recommendations for improving the situation for older women. One is increasing financial education offered by schools, plan sponsors and employers. Women lag men in understanding personal finance, and lower financial literacy is associated with lower confidence in planning for retirement income and lower financial well-being, he writes.

He also calls for increasing the Social Security benefit for surviving spouses to equal 75% of the sum of the spouses’ combined worker benefits. In addition, he’d like to see the Social Security Administration upgrade the cost-of-living adjustment by adopting the Consumer Price Index for the Elderly (CPI-E), noting that this better reflects the types of expenses faced by older Americans.

Divorced women would also be protected better if they could collect Social Security spousal benefits after seven years of marriage, instead of the current 10-year requirement, Hayes writes.

To better support women who must temporarily drop out of the workforce for family care duties, Hayes recommends calculating Social Security benefits over 30 years instead of 35 years, or providing caregiver credits.

Ed Prince is a writer for Rethinking65. In a four-decade career in journalism, he has served as an editor with many of New Jersey’s leading newspapers, including the Star-Ledger, Asbury Park Press and Home News.

Latest News

See all >>

Judge Blocks Trump ‘Fork in Road’ Buyout Program

Even as the program was stayed, more than 60,000 federal employees have already accepted the buyout offer.

Keller to Retire as CFP Board CEO

The board announced today that Kevin R. Keller will retire as CEO, after serving nearly two decades as the organization’s leader.

Citi’s CEO Bucks Return-to-Work Trend

Citigroup CEO Jane Fraser is maintaining a hybrid work policy and believes it could be a competitive advantage.

Musk’s DOGE Agents Access Sensitive Government Personnel Data

The systems include a vast database with birth dates, Social Security numbers, appraisals, home addresses and more on government workers.

FPA’s CEO Dies of Cancer

The FPA’s chief operating officer will serve as interim CEO while the association begins its search for a successor.

Vanguard Announces Its Biggest Expense Ratio Reduction

The cuts across 168 mutual fund and ETF share classes will bring over $350 million in savings for investors.