Paper Spotlight: What’s Good for Women Is Good for Science: Evidence from the American Finance Association

Renée Adams

Michelle Lowry

The reasons that can explain the very important issue of gender disparities in labor market outcomes are still quite nebulous. To remove such disparities we need first to understand the sources of women’s differential labor market outcomes. Differences in human capital have been found lacking in explaining observed differences. Recent developments in the literature point to three potential factors: gender differences in preferences, structure of work that can differentially impact men versus women, and bias. Research on women’s labor outcomes typically only address one explanation at a time, resulting in very limited conclusions. Most of the differential outcomes arise within occupations rather than between occupations, calling for an investigation focused on one occupation.

These limitations are addressed by Renée Adams and Michelle Lowry in their paper “What’s Good for Women Is Good for Science: Evidence from the American Finance Association.” In this work, the authors investigate the importance of multiple factors simultaneously in explaining why females’ and males’ work experiences differ and cast in a within-occupation analyses. To do so, the authors develop a survey with the American Finance Association (AFA) to assess the professional culture in finance academia.

Focusing on within-occupation effects, the authors find no observable gender differences of significance in preferences. This is a surprising result because conventional narratives have always referred to this dimension as a potential explanation. Any preferences that may exist cannot explain women’s worse career experiences. There is an important role that institutions and policy can play in addressing gender discrimination: addressing poor individual experiences, and improving culture, for example by encouraging unconscious bias training. These findings within the academic environment have implications for the broader finance industry.

Spotlight by Andrew Ellul
Photos courtesy of Renée Adams and Michelle Lowry

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