The inaugural Sadie T. M. Alexander conference in economics and related fields, has seen Federal Reserve governor Lael Brainard “applaud and support” the efforts of the organizers taking the initiative to launch the organization with its goal to increase the representation of black women in the field of economics.
Governor Brainard, who took office as a member of the Board of Governors of the Federal Reserve System in June 2014, addressing the conference in Washington D.C., said: “The story of Dr. Sadie Tanner Mossell Alexander is an inspiration for us all. A woman of firsts - the first African American to receive a Ph.D. in economics and the first woman to receive a law degree from the University of Pennsylvania - she was a pioneer who knocked down some daunting doors.”
But, as the former Deputy National Economic Adviser and Deputy Assistant to the President in President Bill Clinton administration, posited: “The question for the women in this room here today is whether you will follow her through those doors and maybe knock down a few of your own.”
The comments came two weeks prior to International Women’s Day on March 8, which is celebrated as annual as a national holiday in around 26 countries globally from Afghanistan to Belarus and China as well as Russia, Vietnam and Zambia. This year, International Women's Day will also be celebrated as a public holiday in Berlin, Germany, the location of the first Simmons International women’s leadership conference was held.
It was in fact in 1921 that Sadie Tanner Mossell (Jan 2, 1898-Nov 1, 1989) became the first African-American woman to receive a Ph.D. in economics in the United States. As the first woman to receive a law degree from the University of Pennsylvania Law School, she was the first African-American woman to practice law in Pennsylvania.
She was active with her husband in civil rights. And, in 1952 she was appointed to the city's Commission on Human Relations, serving through 1968, and was President of John F. Kennedy Lawyers' Committee for Civil Rights Under Law (1963).
Need for Greater Diversity
In her speech, Lael Brainard made a couple of observations about economics. “First, the field of economics is rooted in evidence and research. The second observation follows strongly from the research and the evidence: Economics has a diversity challenge,” she noted.
On this point, the Governor, who was born in Hamburg, Germany, and grew up as an expatriate in Poland and Germany before the fall of the Berlin Wall, added: “There is a stubbornly persistent lack of diversity in the economics profession. Year after year, minorities and women are underrepresented in the pool of individuals awarded a doctorate in economics in the U.S. relative to their share in the broader population, and the gap is especially acute for women of color.”
Indeed, Brainard cited the American Economic Association that reported that in the 2016-17 academic year, seven black/African American women were awarded a doctorate in economics in the U.S., along with eight black/African American men, out of a total pool of 1,150 economics Ph.D.'s awarded overall.
Over a longer time horizon - between 1995 and 2014 - the share of women gaining a doctorate in economics held roughly steady in the neighborhood of 30%. Breaking the figures down, among U.S. citizens and permanent residents earning doctorates, the representation of those identifying as black, Hispanic, or Native American among the pool of doctorate recipients improved from 6% in 1995 to 11% in 2007.
However the improvement has since “unwound and the underrepresented minority share stood at about 7% in 2014”, according to a previous speech given by Brainard titled “Strengthening Diversity in Economics” at the Conference for the 2017 Summer Training and Scholarship Program in East Lansing, Michigan (July 28, 2017).
In Brainard’s own case, she revealed that although she did not have an undergraduate economics degree, later she decided to pursue advanced study in economics “because it provided a rigorous analytical framework and approach to data to address important problems facing America.”
More broadly though, Brainard’s comment made me recall recently meeting Halla Tómasdóttir, businesswoman and entrepreneur who ran for the Icelandic Presidency in 2016 (coming second) and works now for The B-Team in New York trying to engage in a dialogue with corporates to change their business cultures.
The Icelander, who spoke at the third annual Simmons International in Dublin, commenting in relation to gender pay and more women being appointed on company boards, said: “Part of the solution and I really believe in gender balance in general in terms of the dialogue becoming broader. Furthermore, we know through research that the quality of our decisions is enhanced when we have that diversity. Companies with greater gender balance are delivering consistently in terms of greater profits, higher return on equity (ROE) and increased sales growth.”
Tómasdóttir added: “We are more likely to discuss - not just the financial bottom line - when we have men and women around the table in the boardroom.” And, various academic studies have underscored this.
For example a study of 353 Fortune 500 companies titled “The Bottom Line: Connecting Corporate Performance and Gender Diversity” by Catalyst, a leading research organization working to advance women in business, found that companies with the highest representation of women on their senior management teams had a 35% higher ROE (return on equity) and a 34% higher TRS (Total Return to Shareholders) than companies with the lowest women’s representation.
Reinforcing the message, another report Women in business: the value of diversity, carried out by accountancy firm Grant Thornton back in 2015 revealed that companies with women on the Board performed better.
Over recent years, Simmons International conferences have seen a number of influential figures across the globe make keynote speeches. They have included amongst others Dr. Joyce Banda, former president of the Republic of Malawi, at the inaugural event in Berlin, as well as Leymah Gbowee, Nobel Peace prize laureate, activist and author from Liberia and Lenora Billings-Harris, a recognized authority in the areas of inclusion, diversity, and bias. She was named by Diversity Woman Magazine as one of the twenty top influential diversity leaders in the US..
The ‘Economics’ Diversity Gap
But the economics diversity gap starts even earlier, Brainard also stressed.
As academics Amanda Bayer and David Wilcox, who wrote “The Unequal Distribution of Economic Education: A Report on the Race, Ethnicity, and Gender of Economics Majors at U.S. Colleges and Universities” (2017), have documented, women and minorities are also underrepresented in undergraduate economics programs. (Note: This report formed part of Finance and Economics Discussion Series 2017-105 (Board of Governors of the Federal Reserve System)).
“From 2011 to 2015, women accounted for only 31% of undergraduate degrees in economics - substantially below their 57% share of all four-year undergraduate degrees,” Brainard stated. “For black women, the gap is even bigger: they accounted for 1.5% of undergraduate economics degrees compared with a 6.2% share of all undergraduate degrees.”
The member of the Fed further emphasized that a “growing body of research and evidence makes clear that the quality of the economics profession and its contribution to society will be greater when a broader range of people are engaged.”
Various research has revealed that greater diversity results in better outcomes.
“It broadens the range of ideas and perspectives brought to bear on solving problems, and it brings important insights to the analysis of our economy,” said Brainard.
In their paper, “Diversity in the Economics Profession: A New Attack on an Old Problem”, (Journal of Economic Perspectives 30, Fall 2016, pages 221-42), Amanda Bayer and Cecilia Rouse documented the state of play, microeconomic experiments and other research that demonstrate the benefits of diversity for group deliberations and decision making.
For instance, one well-known experiment found that racially diverse groups of students outperformed other groups in solving problems, and another found similar benefits from gender diversity.
Turning to her own institution, the Fed, Brainard said that it is notable that when the Congress established the Federal Reserve System, it “took great care to ensure there would be a diversity of perspectives around the decision-making table in terms of regional representation.”
“That is why we have 12 Reserve Bank Districts represented on the Federal Open Market Committee (FOMC). But we have not lived up to that standard on other dimensions of diversity,” she added.
It was in fact not until 2017, over a hundred years after the creation of the Federal Reserve, that the first African American, Raphael Bostic, was chosen to lead a Reserve Bank.
“We need to do better than that, and we will continue our efforts until the group of people around that table is more like America,” Brainard said.
But in order to achieve their goals, the Governor, who formerly was a member of the faculty at the Massachusetts Institute of Technology (MIT) Sloan School of Management and worked at McKinsey, posited that: “We will need to improve the diversity of the economics ecosystem more broadly.”
She added: “Of course, the Federal Reserve System hires people with all kinds of expertise - from lawyers to law enforcement, from financial analysts to data scientists. But our footprint is especially large in the economics job market, where as a System we routinely hire one of every 25 newly minted economics Ph.D.'s each year. In short, we have a significant stake in the diversity and vibrancy of the economics profession overall.”
Brainard wrapped up her speech asking what people might find by pursuing economics? “As I have noted, you can influence people’s lives for the better. You can craft policy to change our world. You can teach and help shape the next generation. You can find the answers to questions that matter most to you. You can develop the intellectual framework and tools that will enable you to pursue a range of opportunities, not just in economics, but also in business, finance, policy, and non-profits.”
Just as Dr. Sadie Alexander “knocked down the door” and shattered glass ceilings for women and minorities, Brainard said she hoped “you will consider following her through it.” And, in the spirit of Dr. Alexander, the annual conference continues her legacy by engaging with pertinent legal issues in the hope of getting closer to solutions.
Mykelle Richburg, Kayla Jones, Olusayo Adeleye, George-Ann Ryan, Jada Houser, Fanta Traore and Anna Gifty Opoku-Agyeman were behind the initiative launch the organization and this inaugural Sadie T. M. Alexander conference to increase the representation of black women in the field of economics.
