AAmong Australia’s 40 federal treasurers since 1901, there is a striking similarity: not one is a woman. Much the same can be said of the management of other leading economic bodies; the Productivity Commission, Asic and Apra have never been led by women. Nor, in her 60s, has a woman ever been a Reserve Bank governor.
These positions, which impact the country’s economy, and the lives of its 25 million citizens, have never been held by a woman.
The pipeline to these positions of power and to the top boardrooms of business and government across the country often involves the study of economics. But although there has been a push in recent years for women to study in traditionally male-dominated fields, the proportion of women studying economics has declined.
New data and analysis from the Reserve Bank of Australia may have identified one of the obstacles; female high school students think they are worse at economics than they actually are.
A pool of evidence on the “gender confidence gap” – the tendency of women to underestimate their intelligence compared to the self-esteem of men – already exists. This new research suggests, however, that this lower self-perceived ability may deter female students from pursuing studies in economics beyond high school. And the impact of this not only falls on the students, but also on the nation’s potential economic outcomes.
“We’re talking about the people who really hold the reins of power in Australia,” says Cherelle Murphy, EY’s chief economist for Oceania.
“If we don’t bring women economists into the profession now, we’re going to face another generation of leaders where there are too few women.”
The RBA study asked 2,000 years 11 and 12 students across Australia to rate their understanding of economics on a scale of one to five. This found their self-perceived competence, which was tested against their actual performance-based competence in a test of economic concepts.
The results revealed “a pretty stark contrast” between girls and boys, according to RBA Chief Information Officer Jacqui Dwyer.
Compared to almost half of male students surveyed, only 30% of female students said they had a good understanding of the concepts. Meanwhile, 35% of girls said they only had a poor understanding of concepts, but only 20% of boys did the same.
The study also found that students from lower socio-economic ZIP codes felt they were less competent than their wealthier peers. But unlike students from lower socio-economic backgrounds – whose self-rated abilities matched their actual abilities – girls’ confidence was lower than their abilities.
The problem of studying economics and young women
Over the course of a generation, high school enrollment in economics has fallen by 70%. This drop has been more pronounced among female students, with RBA data suggesting a 78% drop in female enrollment since 1992.
There are now two boys for every girl studying economics at school level in Australia. And at university, male students are again more likely to enroll, with female enrollment numbers declining in recent decades. Today, women represent only 37% of economics students.
Dr Leonora Risse, lecturer in economics at the Royal Melbourne Institute of Technology, said “the profession is at fault”.
“The traditional way of teaching economics is theoretical, bland and disconnected from real-world issues like climate change and inequality,” says Risse. When teachers say the subject is “just hard equations” and traditional male voices dominate classrooms, she says it becomes intimidating and exclusionary.
At 15, Skye Dannaher “read everything from Adam Smith to Marx to Piketty and Krugman”.
“It took up pretty much all my free time, I was absolutely obsessed.”
Dannaher, now 19, hoped to complete a doctorate and work in economics research. “The way people interact with resources, how they divide between them and build on them to create new things… I find that absolutely fascinating.”
But their high school education in economics put those goals in jeopardy.
“Being trans, I noticed an almost immediate change in how I was perceived and how I contributed in class,” they say. Moving from an all-boys school to study as a student in a coeducational school, Dannaher also perceived an instant subconscious devaluation of his own opinion, internalizing how he felt perceived by others.
“In class, I would say something, and the boys would say the same thing hours or days later, and they would get a warmer reception for having the same idea.”
In the end, Dannaher felt “always underappreciated”.
“All of this kind of tempered my expectations of how I could study economics in college,” they say. Dannaher is now studying philosophy and history.
The trust gap, Risse says, is “a response to the cues around us and the environment we find ourselves in.”
In the United States, an analysis of economics textbooks found that women were commonly referenced in roles such as shopping or household chores, while men were overrepresented in positions of authority. Through his own teaching, Risse observed the same in Australia.
“The textbooks are meant to use real-world scenarios to illustrate economics in action,” says Risse. “They bring up these traditional stereotypes in their pages.”
Dawson says, in this problem of culture, “you can’t be what you can’t see”. In Australia, barely 15% of economics professors are women, for example. Women also make up only 18% of CEOs and 15% of board chairs.
The RBA study found that the confidence gap for girls exposed to a female teacher was significantly reduced. Dr Rigissa Megalokonomou, a senior lecturer at the University of Queensland’s School of Economics, points to US research which found that girls exposed to ‘successful and charismatic women’ who majored in economics are almost twice more likely to major in economics themselves.
“With female role models, not only do girls perform better, but they also have more confidence in their skills.”
According to Risse, although a girl “may love and be good at economics,” these environmental factors “subconsciously add up” to make women “doubt or question their legitimacy to be in the field.”
Beyond the classroom
“Many of the men who dominate our economic conversations are overly convinced that they are right,” says Emma Dawson, executive director of Per Capita. “The system reflects their way of living in the world and is set up to serve their interests.”
Dawson points to an array of structural deficiencies that exist “often because men don’t necessarily see the problem.” Childcare, for example, has traditionally been viewed as a cost rather than an investment despite the returns the economy derives from spending on childcare.
Then there is retirement. The current average payment for women is a third of the payment for men, quantified by the Australian Human Rights Commission at just $37,000 compared to $110,000.
Getting women into better-paying jobs sooner, supporting super maternity leave and ensuring they are paid on every dollar so part-time workers don’t miss out are ‘all structural changes’, according to Dawson, needed to improve women’s outcomes.
Although we do not consider women’s experience, Dawson argues that women will continue to be more likely to “accumulate poverty over their lifetime.”
But the absence of female economists probably has consequences beyond “women’s issues”. Megalokonomou says that “women economists bring a different perspective on different topics when they are included in the discussion”. Her research observed a general trend that women economists are more likely to support government intervention, environmental regulation, and concern themselves with equality issues, for example.
The RBA survey also revealed that female students are generally more interested in identifying problems to be solved and issues such as globalization and the environment, while male students tend to be more interested in topics such as the stock market and production decisions.
“Male and female high school students have different questions they want answered,” says Dwyer. “And when girls don’t recognize these topics as actually being part of the field of economics, they don’t recognize that economics is for them.”
The result, says Megalokonomou, is the “pattern of misrepresentation stretching from schools to universities to corporations to boards of directors,” losing innovative perspectives in all economic discourse.
“Those who study economics shape the discipline and shape economic policy,” says Dwyer.
“The more we can diversify the people who advise businesses, governments and provide feedback … the more we will see a willingness to challenge orthodoxy.”
Without this diversity in the profession, “we don’t have different perspectives on the kind of economic questions that are being asked,” says Dwyer. “Nor do we have different perspectives on how these questions are answered.”