1 Egan , Matvos and Seru - PowerPoint Presentation

1. 1Egan, Matvos and Seru, 2018,“When Harry Fired Sally: Double standard in punishing misconduct”Gender and Career Progression Conference Bank of England Renée AdamsUniversity of New South WalesAs of September: Oxford

2. I do a lot of work on genderDifferent methods, different subjects, different industries, different topics (typically NOT about discrimination)Women in finance/STEMWomen in Finance, with Tom Kirchmaier.Unsuccessful Teams, with Min Kim.STEM Parents and Women in Finance, with Brad Barber and Terry Odean, Working paper.Gender Diversity in Investment Management: New Research for Practitioners on How to Close the Gender Gap, with Brad Barber and Terry Odean, Report. Women on boards in Finance and STEM industries, 2016. With Tom Kirchmaier, American Economic Review, 2016, 106(5): 277–281Lehman Sisters (2018) with Vanitha Ragunathan, Working paperWomen in artIs Gender in the Eye of the Beholder? Identifying Cultural Attitudes with Art Auction Prices with Roman Kraussl, Marco Navone and Patrick Verwijmeren. Board gender policiesBoards, and the Directors Who Sit on Them (2018) The Handbook of the Economics of Corporate Governance, edited by Benjamin Hermalin and Michael Weisbach, Elsevier.Barriers to Boardrooms (June 22, 2015). With Tom Kirchmaier, Working paper.Gender differences in preferences/skillBeyond the Glass Ceiling: Does Gender Matter? 2012, with Patricia Funk, Management Science, 58 (2), pp. 219-235The Math Gender Gap and Women's Career Outcomes with Brad Barber and Terry Odean, Working paper.Family, Values, and Women in Finance, with Brad Barber and Terry Odean, Working paper.The business caseWomen in the Boardroom and their Impact on Governance and Performance, with Daniel Ferreira, Journal of Financial Economics, December 2009, 94(2), 291-309. Women on Boards: The Superheroes of Tomorrow? 2016, The Leadership Quarterly, Volume 27, Issue 3, June 2016, Pages 371-3862

3. The common theme (other than gender)The reaction!3

4. The common reaction:It must be the women’s fault!4

5. The women’s faultPaintings by women sell for less: “have you considered that women are just worse painters?”Labor force participation explains board leadership patterns: “based on my observations of my wife and her friends, women seem to prefer to stay home”Women hold fewer board seats in STEM firms:“women prefer less math-intensive jobs because they are more social”Women hold fewer board seats in Finance: “women are more risk-averse and shy away from competition. Women do not like math”Female finance professors earn less money: “they are not as productive as the male professors.”5

6. The Economist’s GameInstead of recognizing that people have biases (except when convenient) and having an intrinsic belief that women are equal in most ways (maybe not strength)……Economists assume that markets are fully efficientErgo: discrimination is unlikely to exist (after all competition should eliminate discrimination!)Ergo: women’s (undocumented) preferences and (unmeasured) ability MUST explain differential job outcomes6

7. Let’s play the economist’s gameFemale financial advisors are more likely to exit the firm following misconduct than male financial advisors because…Women shy away from competitionWomen have different preferencesWomen lack networks7

8. Possible? Sure! Since a “quit” is indistinguishable from a “fire”…One story: Being a female financial advisor is not fun. It is a male-dominated field full of overconfident men who are super competitive and risk-seeking. To compete, most of them cut corners (only some are caught). As a woman, I dislike this behaviour but feel I have to do the same to survive. When I am caught, I take it as a wake-up call that I am just not good enough at competing. I leave the industry to have children or do something else.8

9. Possible? Sure.Another story: Being a female financial advisor is a lot of fun. I love beating men at their own game. I’m better at it than they are, since, like them, I cut corners, but am less likely to get caught. The only problem is that when I do get caught, I don’t have anyone to back me up because I am less networked than the men are. My colleague plays golf with the VP. When he got caught, the VP said “boys will be boys” and he kept his job. I don’t play golf, so who will watch my back?9

10. Note thatLower termination in firms with more female executives and similar results for ethnic minorities need not rule out these stories (role models may matter…)The second story is consistent with forms of “in-group tolerance” but the blame is shifted from men to women and the policy implications are different (bias training versus create networking opportunities)10

11. Do I believe these stories?Adams, Barber and Odean (2017): Survey of 135,000 CFAs, 18.4% female11

12. Do I believe these stories?Adams, Barber and Odean (2017)12

13. One point about the paperEven if I don’t believe these stories explain the results, it is important to be aware of this objectionEven better would be if one could rule out that women are to blame (hard)If no referee mentioned this possibility, then that shows that the bar really is higher for women (me) than men (the authors)!Regardless of the exact mechanism, the results suggest the climate in finance is hostile for women.This is important to document! Other research is needed to understand why. 13

14. One more general pointGinther and Kahn (2014): economics remains the outlier with the greatest gender differences in promotionGinther and Kahn (2009) show no gender differences in promotion to tenure -- or full professor -- for all science and engineering (S&E) fields combined.14

15. What are the factors that keep women from advancing their careers?In addition to factors that affect all women, the culture of Economics may be a barrier to women in Economics/FinanceTo change culture, institutions need to change (role models)Awareness is a first step. Conferences like this are a first step.Hopefully more will follow.15