Surprisingly, the statistics are clear...women are still only earning 77 percent of men's earnings. What is the reason for the gap and what can women do to avoid it? There seem to be a number of explanations.

One insight, explained by Dr. Claudia Goldin in her paper in The American Economic Review, is that "The gender gap in pay would be considerably reduced and might vanish altogether if firms did not have an incentive to disproportionately reward individuals who labored long hours and worked particular hours." She believes the solution is in making workplaces more flexible in regard to hours and location--not government regulation or men contributing more at home.

Authors Katty Kay and Claire Shipman offer another perspective in their book The Confidence Code, citing many examples of how women are held back by their lack of belief in themselves. They often feel they have to be perfectly qualified for something before going after it, which according to Kay and Shipman, men don't do.

Regardless of the reasons, the gap is there. To discuss the issue, I sat down with Barbara Stanny, a leading authority on women and money. Stanny is the author of Overcoming Underearning and the soon-to-be-released Sacred Success: A Course in Financial Miracles. She interviewed more than 150 women who made $100,000 or more (she chose that group because some of the highest-paying professions have the biggest gap). She uses the insights from her research to help women take control of their finances and earn more money. Her are some of her expert opinions on this heated issue.

What is the biggest reason for the pay gap between women and men?

Barbara Stanny: I believe the biggest reason is articulated in a cartoon I once saw. All these men are sitting around a conference table. One stands up and says, "Gentlemen, we have to cut expenses in half. We can only hire women." They know that women will accept less.

Women accept less for three reasons. One, we devalue ourselves: We give our skills away for free or less and we don't believe we deserve more. Secondly, women are notoriously co-dependent. They often put other people's needs before their own--it sounds noble but always leads to pain, illness, and resentment. Thirdly, we don't want to be uncomfortable. Every time we do something that is against "the norm," the brain says no, and women stop and water themselves down.

How do women view success differently than men?

BS: The biggest difference between men and women when it comes to money is the following: No matter how much men make, they want more. Once women are financially stable, we are no longer motivated by money. What usually motivates women is the opportunity to help others and a search for significance. Their heart and soul want to make a difference. I asked this group of women making over $100,000, 'Are you doing what you do for the money?' Ninety-five percent said, 'No, I'm doing it for the passion, and I want to be compensated for it, because I am worth it.'

What are women who make a lot of money doing differently?

BS: Women are relationship-oriented--even if they are making six, seven or eight figures. There's a little girl inside them that wants to be liked. But to be successful, you have to make tough decisions that may be seen negatively by others. They toughened up with a shift in their thinking. They thought, "I would rather be respected than liked." One way they were able to get to that point was by having people in their lives providing great ongoing support.

What are four things women can start doing today to earn more money?

BS:

  1. Start asking for more
  2. Stretch themselves and say yes! to things that scare them
  3. Start valuing themselves and honor what they bring to the table
  4. Letting go of what is not working--letting go of the job, relationship, belief, or fear

What is a daily practice that can work for any woman to change her earning potential?

BS: Do what you fear, because that is how you grow.