Women in economics

There has been a big response to a column I wrote for the FT about the male domination of economics, following up Justin Wolfers’ recent one. My conclusion was:

The reputation of economics is already tarnished, even a decade on from the financial crisis, and this new evidence of entrenched discrimination will not improve matters. This is not a women problem, it is an economics problem. It is deeply embedded in the discipline’s culture and norms, and the profession’s senior men need to take it seriously.

Some senior men emailed to ask for suggestions. Here are some.

These come from a Twitter thread compiled by Jan Zilinsky (@janzilinsky):

1/ Some thoughts on gender biases in academia, following up on @JustinWolfers’ article / Alice Wu’s findings on sexist expressions on EJMR

2/ Causal evidence shows that even when full info about candidates’ past performance is provided bias against female candidates persists

3/ The experiment (How stereotypes impair women’s careers in science) is by @ErnestoReuben Paolo Sapienza @zingales pnas.org/content/111/12…

4/ Plenty of issues to dissect (low representation, disrespect online & offline…)

For the thread I want to focus on *unequal treatment*

5/ One thing that bothers me a lot is the co-authorship penalty. Heather Sarsons @saskatchewin shows men who coauthor more are not penalized

6/ but women are less likely to receive tenure if they coauthor more papers: scholar.harvard.edu/files/sarsons/…

7/ That paper is about outcomes in economics. On evidence that women benefit less from co-authorship in polisci see cambridge.org/core/journals/…

8/ The leaky educational pipelines signal more problems… brookings.edu/blog/brown-cen… and @DianeCoyle1859’s ft.com/content/6b3cc8…

9/ And when the path leads to professorship, imagine you are discouraged with comments such as ↡ washingtonpost.com/amphtml/news/w…

10/ Want to end the thread w/ some “what can be done” links. But many steps are tiny, as @cheng_christine said…:

11/ Let me try anyway. First, we can learn pay attention to other disciplines; see this @BetseyStevenson talk youtube.com/watch?v=vsvPg_…

12/ Second, at a minimum, as @Noahpinion wrote workplaces must be professional (why does it need to be said?!)

13/ Third, evaluation nudges could help. Not anonymizing papers/CVs, but moving toward more joint rather than separate assessments…

14/ Promising research shows people rely less on group stereotypes when making joint (not case-by-case) evaluations decisionlab.harvard.edu/_content/resea…

15/ Tools like the gender bias calculator seem fine, as long as there are users motivated to write fair letters…

16/ And it’d be great to eliminate some behaviors that range from baffling to outrageous. Copious examples were shared in the last 1.5 weeks

17/ Things like first-naming female faculty members; title-forgetting; off-color remarks about parenthood; etc…

18/ We could try valuing things other than prestige, as @cjwich pointed out: “As a field, we fetishize hierarchy. ‘Top 5 journals,’ ‘top 10 programs,’ who is/isn’t in the “club” 19/”

19/ Sometimes I lash out at the fashion police b/c the (gendered) focus on some economists’ wardrobe is ridiculous.

A number of people have suggested ending the anonymity of referees’ reports as this conceals biases – there is deep scepticism about the fairness of the process, which is seen as perpetuating privileged networks, mainly male.

Along with many of the female economists who have emailed me, I have observed a range of patronising behaviours – calling women by their first name, men not, is a common one as Jan notes. Offering ‘advice’ to lower one’s ambitions, in research, or submissions and so on. Asking women dispropotionately to do admin tasks, meetings, ‘service’ in the department.

I’d add:

  • senior men are the only people who can address the aggressive culture of economics seminars, which is unique as far as I know. Stop male colleagues from interrupting presenters frequently, rather than giving them space to present. Call people out on hostile, disparaging comments.
  • the ‘publish or perish’ culture for young academics makes it impossible for the primary carer of young children to achieve the expected publication targets; this is usually the woman even in apparently egalitarian couples. As Justin Wolfers has noted, the way policies operate may help men even more. The extension periods for new mothers are laughable, as everyone who has had children really ought to know.
  • I hope male economists would reflect on the recent discussion, acknowledge that the discipline has a problem, and think really carefully about their judgements about people. When you say ‘X is not very good’ and X is female, are you holding her to a different standard than you would a male colleague? The answer is almost certainly yes.
  • I agree about the comment in Jan’s thread about the hierarchy obsession. It is bananas to have only a Top 5 matter….

I hope these provide food for thought. I’ll be happy to update this post with other suggestions.

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Economics for a moral end

I’ve read Pigou’s Economics of Welfare, and I talk to students about Pigouvian taxes and subsidies, but never known anything about the man. So I enjoyed The First Serious Optimist by Ian Kumekawa. The author is a Harvard PhD history student (so kudos to him for having a book published so early in his career!), and this is definitely a historical biography rather than an economics book.

As an economist, and one getting specifically interested in welfare economics, I’d have preferred more about the economic ideas. But for less nerdy readers, there is plenty here on the intellectual trends. And the wider intellectual and political context of Edwardian England, the terrible decades of war, depression and war in the early 20th century, and the post-war swing to Labour and the welfare state, is portrayed very well.

At the end of the book, I decided Pigou the man was still a bit of an enigma, but perhaps someone from a privileged Edwardian milieu, who spent his entire adult life at Cambridge, is just a bit too alien. But the arc of his thinking from classical liberalism to active sympathy for the Labour government of 1945 is fascinating. And the tale is quite sad in the end, Pigou seen as a surly recluse, his star not only waning but utterly shot out of the sky by Keynesianism (and, as so often, Keynes comes across here as a brilliant but not very nice man).

(One is also left wondering how scholars of the future will ever write biographies now we don’t write letters to each other any more? Email exchanges, with their more telegraphic form, or skype conversations – these are how we discuss ideas with colleagues. I suppose conferences are recorded so the video of those formal occasions will be available. That, and the Twitter record? )

I like very much the way the book ends: ” His justification for his career, maybe for his very existence, was to serve a moral end. Perhaps it is this part of Pigou’s systematic framework – its self-conscious motivation – that present-day economists would do best to revisit.. …. It would mean accepting what Pigou had declared in 1908 that, ‘Ethics and economics are mutually dependent’ and that ‘Economics cannot stand alone’.”

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Humanising economists

Cents and Sensibility: What Economics Can Learn From The Humanities, by Gary Saul Morson and Morton Schapiro, made me groan slightly, inwardly, when it arrived at Enlightenment Towers. Did I really want to read another book criticising economics, having just tackled two other recent arrivals in the econ-bashing genre?

In fact, it’s rather a nice argument for economists paying more attention to stories. It also softened me up by starting out by pointing out, quite rightly, that the humanities (‘dehumanities’, the book calls them) have to a large extent brought their decline on themselves by devaluing the idea of great literature, teaching bowdlerised politics and sociology, and generally disappearing down the rabbit hole of critical studies.

Broadly, I agree wholeheartedly with the view that economics, narrowly understood as modelling and empirics, needs to be supplemented by careful attention to history, ideas and culture. This matters because important variables are unquantifiable; because people do not only take decisions on ‘economic’ grounds; and because causes simply can never be identified by looking at macro data, which need narrative to make sense of the numbers. It also matters in a meta way. As this book argues, empathy is vital so researchers understand that some people think differently from them and are not bad or stupid for doing so: “The narrower the set of values entertained and entertainable by our major educational institutions, the less empathetic they become to the population at large, and the more they wind up turning themselves into trainng grounds for one social gruop to maintain its pre-eminence.” A vital message for the academy in our times.

The bulk of the book is devoted to examples of economists who fail to understand the importance of stories and humanity (eg Gary Becker) and those who completely get it (eg Joel Mokyr). I would challenge some of the details or interpretations. For instance, the authors criticise the use of ‘QALYs’ (quality adjusted life years) to evaluate the selection of patients for costly treatments by the UK’s NHS, seemingly imagining that hospitals look at individual patients and take account of their earning potential before deciding to treat them or not. This is an absurd projection of the practices and mores of the US health market on the UK’s non-market system. Still, elsewhere the book makes the very good point that cost benefit analysis is widely tainted by the use of market values only to evaluate benefits – the example is spending to eliminate the parasitic disease of river blindness in sub-Saharan Africa, prevalent in poor areas where people do not earn much – meaning the value of the project hard to demonstrate to donors.

The moral of the book, for economists, is read more history, or novels even. For researchers in the humanities – well, maybe that’s their next book, but the advice probably isn’t to become more like economists.

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They don’t make economists like they used to

I’ve finished reading Will Baumol’s (1952) Welfare Economics and the Theory of the State. It’s a short and seriously impressive book, essentially pointing out that if you assume individuals do not either influence each other’s preferences or affect each other’s profits then you conclude that individual maximization delivers the most efficient outcome and the role for the state to restrict or co-ordinate activity is minimal. The laissez faire argument is inherently circular. However, social influence on preferences is pervasive, production by individual firms is interlinked when there are any economies of scale, and externalities in production and consumption are common. The book anticipates – briefly – much of the work done in the following decades in social choice theory, public choice, and Ostrom-style institutional political economy.

What makes it all the more impressive is that (a) it was Baumol’s PhD thesis and (b) he had read historical works including those in French and German – the book cites Petty, Say, Bastiat etc. He apologizes for not being able to read Italian. Clearly, Baumol was exceptional even for his time and surely was a serious miss by the Nobel committee; but I can’t imaging today’s PhD students ever dreaming of looking at any ‘history of thought’ texts, or (at least for the Anglophones) thinking it might useful to have a foreign language. They don’t make economists like they used to. Reform of the undergraduate curriculum has real momentum now (at least outside the US); time to turn our attention to the graduate courses?

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Agents and theorists

There are three books in one in Richard Bookstaber’s The End of Theory, it seemed to me. This compôte is even flagged up in the subtitle: ‘Financial Crises, the Failure of Economics, and the Sweep of Human Interaction’.

One sub-book is a tedious critique of economics, tedious because like all (the many) similar critiques it (a) says ‘economics’ but means ‘macro/financial economics’; (b) assumes economics is a monolithic subject stuck some time around 1980-85, which was indeed the height of the rational expectations, real business cycle approach. Some of the points Bookstaber makes are perfectly valid. Macroeconomists have responded to the implications of the financial crisis for their approach, but not yet enough – this is why the ESRC has funded the new ‘Rebuilding Macroeconomics‘ network. I also agree in particular with his point about economics needing to get to grips better with self-fulfilling phenomena and performativity. But, really, a lot of economists – at least in academia but I think out in the non-ivory tower world too – are now doing exactly the kind of work Bookstaber enthuses about. I’d argue that even when economists are using rational choice equilibrium modelling, or ignoring the radical uncertainty of the real world, it is often done in a knowing way – that is, understanding the assumptions fail, but using the conclusions they lead to as a way of evaluating what is happening and why. Anyway, his complaints about economics are both wearily familiar territory and decreasingly true; economics is and has been changing a lot. In finance specifically, think of Andrew Lo’s new book, Adaptive Markets.

The second element of The End of Theory is a useful mini-survey of some alternative approaches (alternative to rational choice, maximising, equilibrium) models for financial markets in particular: this includes complexity and emergent phenomena, non-ergodic processes, heuristics in decision making, and so on. None of these is novel either – for example, Paul Ormerod’s Butterfly Economics and Why Most Things Fail tackle many of the same areas, Kahneman’s Thinking Fast and Slow was a best seller and Gigerenzer’s heuristics approach is widely discussed among behavioral economists, while Taleb’s books have brought the ideas about radical uncertainty to millions. Still, having these ideas set out again in a concise and accessible way is useful.

The third book-in-a-book is a very interesting approach to an agent-based modeling approach to the financial system, looking back at the 2008 crisis. Here, the author’s expertise shines through. But this section is very condensed – I wished the whole book had been about this and had used the extra room to say more about the complexities of the financial structure and how the agent based approach can illuminate them. For example, the section on the 2007-8 liquidity crisis in US markets is fascinating but condensed. Again, agent based modeling is hardly new, and is even growing more popular in economics, but I found the detail from someone who is an experienced market participant very interesting, although the idea that agent based modelling really spells the end of theory is not really addressed explicitly.

In the end, I wondered what audience Bookstaber had in mind. The final chapter ends, “I’m a frustrated novelist.” He is a indeed a good writer but needs to work on the narrative arc. I’d have thought the three components of this book appeal to at least two different sets of readers; and it distracted at least this economist reader to have the argument keep heading off on a tangent to criticise economics: ‘And another thing,….’. I hope he goes on to write the book starting to emerge from this one diagnosing the past about an agent based future for finance. If this is the right way to model financial markets, what do we do with it?

PS I see The End of Theory is doing well on Amazon, with some 5* reviews, so my perspective may be jaundiced!

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