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3 February 2017updated 04 Aug 2021 12:17pm

Where are all the women economists?

The winner of the Virago/New Statesman Women’s Prize for Politics and Economics explores how economics views the world through male eyes – to the detriment of all.

By Frances weetman

I dare you to do something. Fetch a piece of paper and write something on it: the names of five famous female economists. Go on, off you go. And no cheating – no googling on your iPhone.

It’s hard, isn’t it? You may have thought of Gillian Tett, Stephanie Flanders or Joan Robinson. But naming five is a bit of a stretch. Most people know the more prominent names in economics – the Keyneses and the Hayeks and the Marshalls – but there are no women among them. Economics does not have a Marie Curie.

Economics has a problem with women. I write this as a woman who has studied, worked in and is now writing about the subject. The data bears this out. Across the UK, just a quarter of undergraduate economics students are women. This is about the same proportion as the economics teaching and research academics at the University of Cambridge: by contrast, women make up 43 per cent of the Cambridge psychology faculty. Where are all the women? Why does economics fail to attract women in the way that other social sciences do?

Perhaps they are discouraged from joining the world of economics as it doesn’t seem likely to reward them with career prospects. According to a 2014 paper by the economists Donna K Ginther and Shulamit Kahn, working with the psychologists ­Stephen J Ceci and Wendy M Williams, once you control for productivity (which they measured by the number of published research articles), men and women have the same promotional outcomes in most academic fields – but not in economics.

Ginther and her co-authors describe economics as “an outlier, with a persistent sex gap in promotion that cannot be readily explained by productivity differences”. Female academic economists are rarely rewarded. In 2014, the Economist published a list of influential figures in the field that featured not a single woman. Of the 76 Nobel laureates in economics, only one has been female: Elinor Ostrom, who won the prize in 2009 for her work examining the use of co-operation, trust and collective action in the management of common-pool resources.

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Either women don’t perform well in economics research, or there is a bias against them when prizes are handed out. I suspect the latter. The post-Keynesian economist Joan Robinson was never awarded the prize, though many believe that she would have been a perfect candidate. The reason often given is that she was not a mainstream economist but, according to my calculation, around 45 per cent of Nobel Memorial Prizes in Economic Sciences have been awarded to those who could be considered non-mainstream candidates.

Meanwhile, two of Robinson’s (male) PhD students went on to become Nobel laureates. And, just like her, their approach was not mainstream. Robinson influenced economists as diverse as Nicholas Kaldor and the Greek economist and recent finance minister Yanis Varoufakis. But she didn’t have the right body specification.

Economics has a more significant problem than recruitment. Not only does it struggle to attract women into its academic departments, but mainstream economics often refers to models that are inherently sexist. Homo economicus is the supposed ideal form of behaviour – a theoretical human being used to try to find answers to economic problems. There are many flaws in this model. Real people, for example, are not entirely financially self-interested like he is. And there is a more important criticism: Homo economicus is a man. His competitive behaviour seems stereotypically testosterone-fuelled and his extensive use of mathematics is considered masculine (even if it shouldn’t be).

What this means in practice is that all economic analysis is based on a belief that a male pattern of behaviour is somehow the norm. As the Cambridge economist Victoria Bateman wrote in an article published in the Guardian in 2015:

The questions economists seek to answer, the tools they use to help find the answers (that’s principally maths, rather than the applied topics that research suggests women are drawn to), the standard assumptions they make along the way  (that people are emotionless, free and selfish), and the things they choose to measure all reflect a traditional and stereotypical male way of looking at the world.

Economics views the world through a male prism: it is analysis undertaken by men, about men, for men. In retaliation, I sometimes refer to economics as a woman. Why? All the men are trying to do her, and mostly they’re failing.

Economics is interested in gender disparity – the pay gap between men and women, for example. However, do economists undertake their analysis in a non-sexist way? Neoclassical economics, in essence, claims that sexism doesn’t and cannot exist, at least not in the long run. This is partly because there is no incentive for firms to discriminate on the basis of gender, especially if women improve a firm’s efficiency. In any case, the presence of a gender pay gap should nudge firms into employing more women: if they are paid less than men, it is less costly for a firm to employ them than men. So you would expect many more women to be employed than men. By this logic, neoclassical economics predicts that gender disparities will eventually vanish into thin air.

Isn’t this the same as arguing that something doesn’t exist simply because it oughtn’t? There is an entire body of literature showing that women earn less than men and are under-represented in many industries. In 2016, the UK average gender pay gap was estimated at 13.9 per cent: for every pound earned by a woman, a man earns just under £1.14. Yet neoclassical economics tells us frail, hysterical dears that we should calm down. Be reassured – all those successful male economists have figured it out.

We can compare this analysis to the way that sexism is explained in psychology. Here, tradition and the social entrenchment of values are considered to be among the explanations of gender disparity. The numbers indicate that university psychology faculties are far more welcoming than economics faculties to women. I strongly suspect that the explanations of sexism from mainstream economics were written by men – and those from psychology weren’t.

Diversity, sex and sexuality are subjects seldom discussed in economics. When they are, either the analysis is treated as heterodox, or the discussion lacks rigour. Feminist economics does exist but as a minority pursuit that is never awarded accolades. This comes as no surprise: men are the guardians of economics. They dominate the committees that decide which theories to support.

Economics aims to study human behaviour. Even if many women are homemakers and “soccer moms”, this does not make their economic actions irrelevant. Indeed, according to a 2015 commentary by Forbes, women drive 70 to 80 per cent of all consumer purchasing (this is what economists call buying real stuff). That applies not only to handbags and shoes but industries that are thought to be male. More than half of all video game sales to people aged over 18 are made to women. Forbes even goes so far as to state: “If the consumer economy had a sex, it would be female.”

Economics has ignored women to the detriment of all. While there are many explanations for the financial crisis of 2007 and 2008, one of the more prominent theories is that bankers and financial traders were taking very risky bets. Fancy financial instruments such as collateralised debt obligations and derivatives may have paid off in the short term, but they ultimately caused instability that led to the near-collapse of the world economy. The bankers were running a high-risk, high-reward scheme.

There is early evidence for why men may be more inclined to take financial risks. A 2015 study published on the Nature Publishing Group’s Scientific Reports website examined what effects, if any, the level of cortisol, a steroid hormone released in response to stress, had on risk-taking behaviour. Participants were invited to take part in a trading game after their endogenous cortisol was measured and also after they had taken oral cortisol. It was found that the level of cortisol, as measured in saliva, was strongly correlated with the amount of trading undertaken by men, but the same link was not shown in women. This could indicate that men under stress are more likely to take risks, whereas women aren’t.

Men dominate in the financial sector just as much as they do in academic economics. A Morningstar research report in 2015 found that less than 10 per cent of US fund managers were women. They comprise just 4 per cent of CEOs of the top 500 companies as ranked by the financial services company Standard & Poor’s.

Has this dominance of men in the financial sector been damaging? I would say so. A 2016 study conducted by the Peterson ­Institute, a think tank based in Washington, DC, analysed 22,000 publicly traded companies in 91 countries and concluded: “A move from no female leaders to 30 per cent representation is associated with a 15 per cent increase in the net revenue margin.”

It is partly for this reason that many investment banks run access schemes for women. They don’t do it to be nice: it’s financially beneficial. However, these schemes are rather like sticking a plaster on an amputated leg in an attempt to stop it bleeding. Financial institutions struggle to retain the women who enter the sector. A Twitter account written by a former bond executive, @GSElevator, supposedly reports snide comments made by financiers. Here, women are referred to as “skirts”.

Another reason why the number of women in finance is low could be the way in which bankers are recruited. A trick that banks commonly use is to ask a candidate a quick-fire arithmetic question as they enter the interview room, even before they have sat down. If the candidate doesn’t answer by the time they have reached their seat, it’s game over. The hormone study shows that men have a considerable advantage in such stressful situations. And that is not necessarily to the bank’s gain, particularly as women are known to improve corporate success by often taking more considered, thoughtful approaches to decision-making.

Not only does economics struggle to attract women, it discourages those who take up the subject. Whatever the current fashion or preferred theory, it is set by men – and when economists focus on the male, they neglect the female, even though women dominate many of those parts of life that they are seeking to analyse. This sexism needs to end. Economics needs to realise that more than half of the world’s population is not made in man’s image.

This is an edited extract from Whose Model Is It Anyway? Why Economists Need to Face Up to Reality (Virago).

In October 2015, the Virago/New Statesman Women’s Prize for Politics and Economics was launched, with the aim of finding new female writers in those vital, society-shaping fields that have historically been dominated by men. The winning proposal is developed and published as an e-book by Virago.

The 2017 prize is now open for entries by debut writers, which will be judged by the broadcaster Samira Ahmed, the economist Diane Coyle, Tom Gatti, the culture editor of the NS, and Lennie Goodings, publisher at Virago.

Event Frances Weetman will discuss women and publishing with Lennie Goodings, Publisher at Virago and Helen Lewis, deputy editor of the New Statesman, at the Cambridge Literary Festival on 23 April at 4pm

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This article appears in the 01 Feb 2017 issue of the New Statesman, American carnage