An unexpected battle for the position of Federal Reserve chair has ensued over the past week between Federal Reserve Vice Chair Janet Yellen and former director of the National Economic Council, Lawrence “Larry” Summers. For a while, Yellen seemed the likely pick and was poised to make history as the first woman appointed to chair the Federal Reserve—until Summers entered the fray. Washington Post reporter Ezra Klein has noted that despite Yellen’s stellar qualifications, there is a “subtle, sexist whisper campaign” against Yellen in Washington circles.
If nominated and appointed to chair of the Federal Reserve, Yellen would sit at the top level of economic policy-making for the United States. But the discussion about Yellen and Summers has also brought to light the importance of women entering the economic policy-making pipeline early, in academia and at the local and state levels. Currently, far fewer women than men are pursuing PhD programs in economics or policy-making positions in general—gaps that dilute or completely exclude women’s experiences in economic policy-making debates.
Heidi Hartmann—an economist and the president of the Institute for Women’s Policy Research, a D.C.-based think tank working to address the needs of women and families—has over the course of her career seen the importance of women setting economic policy. Also a MacArthur Fellow, Hartmann has become acquainted with both Yellen and Summers over the course of her career, and while she believes both have excellent credentials, she is inclined to support Yellen for chair of the Federal Reserve.
“As a practical matter, women and men have different life experiences. Some men spend more time raising kids, but even today it’s still mostly women raising families,” Hartmann said. “Whether or not [Yellen] has kids of her own, she has most likely thought about it more because she’s a woman—thus she is more likely to think about family care—an important economic issue.”
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“Women are also more aware of the damage done by poverty on parents and kids,” Hartmann pointed out. This is particularly important given that women tend to dominate low-wage sectors such as caregiving and restaurant work. Hartmann herself is one of the rare economists who examines in-depth the economic status of immigrant women and the importance of paid sick time, family leave, and health care—including reproductive health care—on families.
All of this makes clear the importance of encouraging women to enter two key pipelines: economics graduate programs and politics at the local and state levels. Yellen’s rock-solid credentials begin with her education. She holds a PhD in economics from Yale, where she was also a teaching assistant to James Tobin, a renowned economics professor and a Nobel Prize winner. Tobin taught macroeconomics and money and banking, fields Yellen went on to specialize in.
A PhD in economics is a common qualification among top economic policy advisers like Summers and Christina Romer, former head of the Council of Economic Advisers under President Obama. Yet too few women are pursuing PhD programs in economics. A 2011 report published by the Federal Reserve Bank of San Francisco—which Yellen previously led for six years—discusses the “persistent underrepresentation of women in economics” and the roots of this underrepresentation.
The report concludes that the presence of women faculty in fields like economics begets more women taking an interest in those fields: “[A] larger share of women on the economics faculty of top universities has led to more female students entering economics PhD programs.” As of 2003, the percentage of female faculty in economics programs hovered around only 30 percent, and in 2009 women accounted for just 34 percent of first-year PhD candidates in economics programs. The percentage of women in some PhD economics programs has actually fallen in recent years.
In addition to the academic pipeline, the policy and public service pipelines need more women. State legislatures have the power to set minimum wages, enact paid family leave legislation, and champion important protections for historically unprotected sectors like caregivers. Today, the number of women in state legislatures rests at 24 percent, and the figure in Congress is 18 percent. There is considerable evidence showing that women’s presence in legislatures increases the likelihood that topics like paid family leave will be addressed.
And there is evidence that too few women affects the outcome of critical economic debates—both in the United States and abroad. The New York Times pointed out on Monday the numerous times Summers and his “fraternity brothers” have tangled with women economic policymakers in the past:
In 1998, [former Treasury Secretary] Robert Rubin and Mr. Summers opposed Brooksley Born, then the chairwoman of the Commodity Futures Trading Commission, for correctly calling for the regulation of derivatives; in 2009, Mr. Summers squelched the sound recommendation of Christina Romer, then an economic adviser to Mr. Obama, for a larger stimulus. In the first Obama term, [former Treasury Secretary Timothy]. Geithner clashed unhelpfully with Sheila Bair, then the chairwoman of the Federal Deposit Insurance Corporation, and with Elizabeth Warren, then the chairwoman of the Congressional panel overseeing the bailouts.
In line with the San Francisco Federal Reserve’s study about the importance of women faculty in recruiting women economics students, having Janet Yellen as chair of the Federal Reserve could inspire and influence more women to pursue economic policy-making. This unexpected battle for chair of the Federal Reserve will hopefully yield greater understanding about why women—who comprise more than 50 percent of the electorate—must play a greater role in setting economic policy. “Policymakers’ experiences color how they view the world,” Hartmann said. “And beyond that, we need to have a government that looks like the people it represents.”