A couple of weeks ago, I was strolling through the marble corridors of the mighty Federal Reserve in Washington when I spotted a gaggle of students from different colleges. They were taking part in a Fed competition meant to inspire would-be economists to get excited about monetary policy.
So far, so encouraging; after all, the world needs a new generation of economists with public service ideals. But there was a catch: although the team that won the challenge (from Pace University) included women, most of the runners-up who were milling in the corridors were male.
If there were more male entrants to the competition, that is certainly not the fault of the Fed; on the contrary, like most western central banks and other public and private financial institutions, the Fed tries to celebrate female economists. It took care, for example, to post a picture of the smiling Pace team — with its students of both genders — on the website. And it has a particular reason to bang the drum about female financial power: Janet Yellen, the current (but outgoing) Fed chair, is the first woman to hold this position.
In spite of Yellen’s seniority, the stark fact remains that economics — and economic policymaking — is still mostly a man’s domain. Yes, there are some women at the top: aside from Yellen, the Fed board includes Esther George, the no-nonsense head of the Kansas Fed. Then there is Christine Lagarde, head of the IMF.
But barely one-tenth of tenured economic professors in America are women and only one woman has ever won a Nobel Prize for economics (Elinor Ostrom). Across the world, only 12 central banks — or 6.5 per cent of the total — are run by a woman. (This figure has declined in recent years: there were 17 five years ago.)
The gender bias is pronounced further down the ranks too. Yes, there are more mid-level women in economics. But in my own two-decades-long career as a financial journalist, I have often sat in rooms at central banks or economic seminars where I was one of the only women there.
Why? Depressingly, some economists I know still quietly blame biology, arguing that women “naturally” gravitate towards softer social sciences rather than number-crunching, while men are somehow innately better at quantitative skills. If this were true, it would certainly matter, given that economics has become increasingly dominated by quantitative analysis in recent years — but more on that later.
Others blame motherhood. It is certainly true that for female economists it can be difficult to juggle family and work, since the crunch moment for academic tenure — and policymaking careers — tends to coincide with peak childbearing years. That may help explain why there are so few women in senior policy roles, despite the fact they make up a third of economics undergraduates.
But for my money, the real issue is culture — and prejudice. In the western world, money has traditionally been perceived as a male-dominated subject. So has the business of government. This has created a self-perpetuating pattern: because girls could not see many female faces in senior policymaking roles or in academia, they assumed that economics was a male area. So they kept away. The consequence is an environment where bias can emerge in subtle and less subtle ways.
A couple of years ago, Alice Wu, an economics student at Berkeley, analysed a million posts on an online message board called Economics Job Market Rumors. Her research showed that when economists discuss men they use words such as “mathematician”, “motivated” and “Nobel”; for women there were more words like “hotter”, “marry” and even “feminazi”.
Will this change? Maybe. Women such as Yellen and Lagarde firmly believe that economics needs to be more inclusive for the sake of its own credibility. (Lagarde is fond of joking that the financial crisis might never have occurred if it had been Lehman Sisters trading mortgage securities.) Their visibility and widely admired track records have made them potent role models for girls. Yellen, for example, has deftly managed to start the process of “normalisation” in monetary policy without sparking a financial shock, keeping a potentially fractious board together in the process.
Across the world, too, there is ample evidence that women can play a bigger role in economics — if given the chance. One oft-ignored fact is that the region with the highest female representation in central banking and economics is not actually America, but Asia.
More specifically, in countries such as Malaysia, Thailand, the Philippines and Singapore, more than half of senior central bank managers are women. Furthermore, in these countries female students excel in economics courses. That should make European central banks blush. It should also counter any notion that there are innate biological reasons for men dominating the world of money.
But as my encounter with the group of economics students at the Fed suggests, it takes time to change ingrained attitudes. What is perhaps particularly dispiriting is that when President Donald Trump decided this year that he wanted to appoint a new head of the Fed, he did not appear to consider any women at all. In February, Yellen will be replaced by an apparently less well-qualified man, Jerome Powell. The only silver lining is that when she leaves office, Yellen will be able to speak more forcefully about the need to attract more women to the economics game (among other things). Here’s hoping.
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