October 2019 newsletter: The new INOMICS handbook

22 Oct 2019

The 2019 INOMICS Handbook1 was published as we went to press in July.  Retaining the aim of the earlier (2017 and 2018) editions of  'helping readers develop their careers as economists', the latest handbook has added reflections on a selection of key topics within economics that have exercised readers of this Newsletter in recent years and, indeed, in this issue.

Two issues that readers of this Newsletter will recognise immediately concern gender in the economics profession and the economics of the environment.

Women in the economics profession

Since it was established in 1996 the RES’s Committee on Women in the Economics Profession (RESWC) has used its regular surveys to show that women are underrepresented in senior academic positions and that while the situation in the UK has improved rather than deteriorated, there is still a long way to go.2

Sadly, according to the Handbook, the situation outside the UK may be getting worse rather than better. The article ‘Does Economics Have a Problem with Women?’ by William Pearse,3 is not always clear on its sources of data but it cites reports from both the Australian Department of Education and the American Economic Association as indicating that progress may actually have gone into reverse.  Most alarmingly (in Australia) the lack of progress in economics contrasts starkly with developments in the STEM (science, technology, engineering, mathematics) disciplines which were once notorious for their underrepresentation of women. The problem begins early. In most disciplines in the USA (according to the New York Times) women make up the majority of undergraduates who complete their degrees. But in economics it is just 35 per cent. These numbers dwindle as we proceed through higher degrees. One fifth of incoming students to doctoral programmes at top US universities (NYT again) are women.

When it comes to careers (as repeated RESWC surveys have shown here) underrepresentation increases with seniority. This is part of the ‘leaky pipeline’ analogy, whereby a quantity of female talent is lost at each of a series of stages. ‘The more senior the economist, the less likely it is to be a woman’ (Pearse, p.4). In the US it seems, female economists are twice as likely to be denied tenure as their male counterparts and of the women who jump this hurdle only 29 per cent achieve a full professorship after seven years, compared with 59 per cent for men.

Needless to say (and the RESWC has also reported on this for the UK), this underrepresentation is reflected in a noticeable gender pay gap. What is particularly interesting in the AEA survey, however, is the split between men and women in their explanation of these differences.  That some economists should find the explanation merely reflects rational choice is hardly surprising. 54 per cent of men surveyed (beneficiaries of the pay gap, of course) thought it was explained by occupational choice and level of educational qualification. By contrast, only 14 per cent of women thought this was the case.

Disparities in remuneration are not the only reason for concern. Pearse raises the possibility that the gender composition of the profession influences (distorts?) its intellectual and eventually its policy content. 

Simply put, academics research areas in (sic) which they are already familiar and/or have personal connection/stand to gain from. The underrepresentation of women, therefore, inherently limits the variety of questions economists look at (a shortcoming that applies, even more strikingly, to people of colour) and allows white male opinion to remain the governing opinion. This lack of diversity is unquestionably constraining the field's intellectual development and stymieing its ability to bring about transformative change. (Pearse p.4)

Emmanuelle Auriol’s4 evidence is cited as showing that this results in something like a ‘gendered division of labour’. After graduation, women tend to gravitate towards ‘more people-oriented sub-fields like “labour, health and education” while men are drawn to macroeconomics’. (Pearse, p.6). The result is that women are, to some degree, focusing their efforts (to publish, for example) in sub-fields in which publishers and editors (predominantly men of course) have less experience and, maybe, interest. This reduces their chances of publication which, in a publish or perish culture, helps to complete a vicious circle. When it comes to publishing, The Economist5  published evidence in 2019 that female economists are often held to a higher standard than their male counterparts. This is demonstrated by the higher number of rewrites requested and the higher demands for originality and rigour. There may also be evidence that where work has joint male-female authorship (and joint authorship is a growing trend) the male author tends to get the greater credit.

What is to be done? The Handbook’s recommendations are neither very radical nor original. ‘Candid discussion of implicit biases must take place; high female dropout rates need thorough investigation; and clear descriptions of female contribution to co-authored pieces have to be guaranteed.’ (Pearse p.6) But Pearse is surely right in saying that the need is urgent.

The case for ecological economics

Another issue covered in the 2019 INOMICS Handbook is climate change where economics is accused by the author, James Matthew Alston,6 of apathy and lack of interest. It may be true that economics has been a bit slow to recognise the urgency of the situation and that traditional notions like ‘equilibrium’ are unhelpful in potentially explosive situations characterised by ‘positive feedback’, but the RES can at least claim to have appointed, in Lord Nicholas Stern, a leading environmental economist and author of the Stern Review on the Economics of Climate Change (2006) as its President (2018-19).7

Alston’s starting point is a number of recent reports on changing atmospheric conditions have already established that climate change is extremely costly and thus that any steps taken to mitigate these effects have the potential to yield a monetary reward. ‘But economics hasn’t cottoned on’. Nor it seems, has the general public. A 2018 Gallup Poll showed that between a quarter and a half of populations sampled in the US, Asia and the Middle East believed that climate change would affect them in their lifetime, even though the effects are being felt already.  According to Alston, economics has traditionally assumed that technological innovation can overcome any biophysical limitations the earth may have, even though Kenneth Boulding warned, as long ago as 1966, that we would one day find that resources were finite.

How do we change attitudes like this? One obvious approach is to stress the connection between, for example, air pollution and ill-health or drought and forest fires. Focusing on negative events that people can see for themselves ought to change minds. But it seems that people are surprisingly resistant - often accepting the connection but failing (resisting?) to see what they can do as individuals.

Alston's hope appears to lie with 'ecological economics' which he describes as a discipline aiming to make economics more cognisant of ecological impacts while making ecology ‘…more sensitive to economic forces, incentives, and constraints’ (Alston, p.17). One way of doing this is to stress that technology cannot endlessly circumvent environmental constraints. There are limits and when we seek to exceed those limits (as now) then there are costs. From this realisation, it is then important to put a monetary value on the costs of environmental depletion. Dealing in monetary values will attract people’s attention.

To this end, the International Society for Ecological Economics  encourages research towards ‘...developing a sustainable world’. Much of this research is policy-focused, including the potential tax reform and the effectiveness of environmental protection measures. Much of this research is published in its own journal, Ecological Economics.8  The International Journal of Ecological Economics and Statistics9 has a particular interest in the development of ecological and statistics and the application of mathematical modelling to ecological processes.

The 2019 issue of the Handbook also includes more traditional features including ‘The Soft Skills You Need to Succeed’; ‘What Makes a Successful Economist’; ‘Recommended Study and Career Opportunities’; an interview with Professor Esteban Rossi-Hansberg (Princeton) and details of prize awards.

 

Notes:

1. Inomics Handbook, 2019 (Inomics, Berlin 2019). Available online at: inomics.com/handbook

2. For example ‘Gender balance in UK economics’, Newsletter no. 178, July 2017. See also two papers at the recent Annual Congress of the European Economic Association: K Mumford and C Sechel, ‘The Gender Pay Gap among Academic Economists in the UK: New survey evidence’, https://www.eeassoc.org/doc/upload/THE_GENDER_PAY_GAP_AMONG_ACADEMIC_ECONOMISTS_IN_THE_UK_New_survey_evidence20190822200608.pdf) and A Cassarico and S Latanzio, ‘The Gender Pay Gap:  New  evidence  from  Italy  on  what  drives  inequality between men and women's earnings’, https://www.eeassoc.org/doc/upload/THE_GENDER_PAY_GAP-_New_evidence_from_Italy_on_what_drives_inequality_between_men_and_womens_earnings20190821203704.pdf

3. William Pearse is a senior editor at INOMICS and a graduate of Sussex University and the Freie and Humboldt Universities in Berlin.

4. Emmanuelle Auriol is a Professor in the School of Economics at the University of Toulouse.

5. ‘Economics is uncovering its gender problem’ The Economist, 21 March 2019. Accessed 2.9.19 at: https://www.economist.com/leaders/2019/03/21/economics-is-uncovering-its-gender-problem  See also L Hospido and C Sanz GENDER  DIFFERENCES  IN  THE  EVALUATION  OF  SUBMISSIONS  TO ECONOMICS CONFERENCES: Evidence that male referees favour papers by men', (https://www.eeassoc.org/doc/upload/GENDER_DIFFERENCES_IN_THE_EVALUATION_OF_SUBMISSIONS_TO_ECONOMICS_CONFERENCES--evidence_that_male_referees_favour_papers_by_men20190816152557.pdf

6. James Matthew Alston is the Content Marketing Manager at INOMICS and a graduate of Cardiff and Freie University Berlin.

7. And see above pp.5-9

8. https://www.journals.elsevier.com/ecological-economics

9. http://www.ceser.in/ceserp/index.php/ijees