Market Update: Women are underrepresented in economics. That hurts the data companies need. – Full Analysis

The U.S. economics profession historically has been dominated by men and continues to be plagued by various forms of gender discrimination, despite milestones such as the #Metoo movement and advancements by women in business and politics. In fact, the share of women starting economics PhDs trended downward for the third consecutive year in 2024.

The gender gap negatively affects the science of economics, according to Dr. Yan Chen, a professor at the University of Michigan’s School of Information. Businesses rely on economic indicators—for example GDP growth, unemployment rates, and consumer confidence—to make informed decisions, and a lack of diversity in the profession can impact the data.

“[Women economists] are given less credit for equal collaboration,” Chen told The BiGS Fix. “Their work, their research, is less cited. And this affects how good the science is. Having diverse perspectives improves how science is done in the economics profession and other fields.”

For example, Chen said, before women worked in the economics profession, when a woman took a maternity leave to care for her baby, her contribution to GDP was considered zero. But if the woman decided to return to the workforce and hired a nanny, her work again contributed to GDP—and so did the nanny’s work.

Chen argued that the dearth of women economists meant that the labor of infant caretaking was left out of the GDP: “Before women entered the economics profession, it was taken for granted that zero contribution was okay,” she said. “Now we adjust for that.”

In addition, women may pursue certain questions or subfields at higher rates than men; the “missing” contributions of women economists can thus lead to a lack of knowledge in those domains. For instance, Dr. Emily Brearley, a development economist who focuses on climate and agriculture, says that women economists tend to be more interested in climate change than their male colleagues.

“Perhaps we would be further along in an energy transition if we had more women in power in energy companies,” Brearley told The BiGS Fix.

Fueling the gender gap: gender bias, sexual harassment

Of course, there have been advancements, including women who attained some of the highest achievements in the field. Two women recently won the Nobel prize in economics, Dr. Claudia Goldin of Harvard University (2023) and Dr. Esther Duflo of the Massachusetts Institute of Technology (2019), and Dr. Gita Gopinath of Harvard served as chief economist at the International Monetary Fund from 2019 to 2022, and currently serves as the organization’s first deputy managing director.

Yet problems remain. After the emergence of #MeToo, an American Economic Association survey released in 2019 shed light on reasons for the underrepresentation of women. The survey revealed a high level of gender bias in the economics profession, with nearly half of the women respondents saying they had experienced discrimination and more than two-thirds saying their work wasn’t taken as seriously as that of male colleagues. In addition, hundreds of women reported being sexually harassed, assaulted, or inappropriately touched by male colleagues.

A New York Times article about the survey results quoted Ben Bernanke, the former Federal Reserve chairman who at the time headed the American Economic Association, as saying, “It’s bad for economics. … We appear to be dissuading talented people from entering the field.”

Brearley confirmed the reports of discrimination against women. “They suffer tremendous sexual harassment in universities and in the workforce. They find it harder to get tenure,” she said. “You are far too threatening if you have a PhD.”

A key reason for the problem is bias, a natural human trait, said Brearley, who earned her PhD from the Johns Hopkins School of Advanced International Studies and has worked for the World Bank and other international organizations. This bias isn’t necessarily nefarious or deliberate, but the common tendency to associate with people similar to us can lead to continued disparities when it isn’t checked. As Brearley said, “I’ve rarely seen a man with power in an organization pull up a woman to succeed him.” When men occupy most positions of power and gravitate toward supporting male successors, gender inequality is locked into place.

When women do attain higher standing, they sometimes perpetuate the very inequality they overcame, a phenomenon known as “Queen Bee Syndrome,” in which senior-level women distance themselves from junior female colleagues as a way of protecting their own status—at the cost of broader gender equity.

What’s behind the lack of interest in economics

Women are underrepresented at every stage of the academic ladder in economics, according to Chen. Research shows this starts at the beginning, with women declining to major in economics, representing only about a third of undergraduate economics majors in recent decades.

Research published by the American Economic Association this year explored why women show less interest in the field.

“Women are more likely than men to believe that economics is primarily concerned with traditionally male-stereotyped topics and career paths, such as the stock market, money, finance, and investments,” the research said, adding that, “we observe stark gender differences in the topics that students are interested in, with women being more interested in studying poverty and discrimination in the labor market and less interested in topics like finance and the stock market.”

Math skills, the ability to earn good grades and interest in the material were also cited by female students as reasons they were less interested in taking economics courses or selecting the field as a major or a minor.

A further reason for women’s lackluster representation in economics is the nature of the profession, which is data-driven, but makes limited assumptions, said Eve Rodsky, an organizational management expert.

Typically, U.S. economists use how much we transact as the basis for measuring our economic activity (GDP), Rodsky said. They don’t consider how we use our time as a key economic indicator. Just like Chen’s nanny example, unpaid labor that isn’t considered as a contribution to GDP includes breastfeeding, buying household supplies, and making school lunches. The impact becomes clear when you consider that the Centers for Disease Control and Prevention estimates that a newborn baby feeds eight to 12 times a day. People—mostly women—caring for infants spend hours each day at the task.

Because women shoulder the majority of unpaid domestic work and childcare for their homes and families, it’s easier for women to become disillusioned by what economics represents, said Rodsky, who has an undergraduate degree in economics from the University of Michigan and a law degree from Harvard and has worked as a corporate attorney and for J.P. Morgan.

“The women who are civic activists have a harder time fitting into the assumptions and models of economics,” Rodsky told The BiGS Fix. “The entire discussion has nothing to do with well-being. Where are the care relationships? Where is the fact that we only grow as a society because of unpaid labor?”

After progress, growth is slowing

There has been progress over the last 50 years in the share of women earning advanced degrees in economics, though that advance has slowed in this century, according to a 2024 report by the American Economic Association’s Committee on the Status of Women in the Economics Profession.

The committee conducted a broad survey of U.S. university economics departments in 1972 and found that women represented only 7.6% of new PhDs, according to the report. The two decades afterward saw significant improvement. By 1994, women made up almost a third of new PhD students.

However, that momentum has been lost in recent years, according to the report. After women reached a peak of 38% of new PhD students in 2021, their share was down in 2024 for the third year in a row, at 36%.

“Commitments at both the [university] department and [economic] discipline levels to make the field inclusive and equitable are critical to making the field more representative of the people and societies it studies,” the report said.

Women fare better in shares of PhDs granted in other social sciences in the U.S., according to a Brookings Institution commentary published in 2021. In 2020, the percentage for women in political science was 39%; in business management and administration, 42%; in sociology, 59%; and in psychology, 72%.

How business leaders can help

Chen’s research reveals a “light-touch, low-cost mentoring method” that business leaders can use in the workplace to help women economists in their organizations or industries.

“If a junior colleague just published a paper or came up with a new product, you want to publicize them, especially when they’re underrepresented,” Chen said. “You want to send out that email to your entire group and say, ‘Look, so-and-so just published a new paper, kudos! Or so-and-so just finished this wonderful new product for our organization.’”

More generally, the work of Nobel laureate Goldin yields lessons for corporate leaders in how to attract and maintain qualified women employees. One of Goldin’s central findings is that gender differences in pay and workforce participation are often due to differences in the division of unpaid caregiving responsibilities.

Programs to help working mothers manage these unpaid responsibilities include subsidized daycare, after-school programs and remote work, according to Goldin.

Barbara DeLollis contributed to this report.