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Banking on gender balance: Why diversity in economics equals better decision making – Dr. Luci Ellis, Assistant Governor (Economic) at the Reserve Bank of Australia

Sydney

Dr. Luci Ellis is Assistant Governor (Economic) at the Reserve Bank of Australia – the Australian central bank – where she is responsible for the Bank’s Economic Research departments, as well as being the chief economic advisor to the Governor and the Board. She also chairs the Bank committee responsible for its data strategy and is the executive sponsor of the Bank’s Business Analysts Community, its Mathematica Users Community and its LGBT+ allies employee resource group. Luci has been a member of the Australian Statistics Advisory Council since November 2015.

Luci Ellis - Reserve Bank of Australia
Dr. Luci Ellis

“…if you aren’t attracting a diverse pool of candidates, you are missing out on many of the top candidates. Nobody seriously defends the idea that all or even most of the raw talent is to be found in one sex, or race or any other single group, so it must be that a team skewed to one group will be weaker than one selected on genuine merit…”

Economics – the perfect combination of human behaviour, maths and doing something for the public good

I’ve been fascinated by economics as a subject since studying it at high school. It seemed to offer the perfect combination of human behaviour, maths (which I was always quite good at) and orientation towards doing something for the public good. I always wanted to study economics and work in the field in some capacity.

Joining the Reserve Bank of Australia [RBA] was almost an accident. I was supporting myself through university by working at a stamp and coin shop. It happened to be the Australian agent for a brand of stamp albums produced by a firm in Leipzig, East Germany (as it was then). After the Berlin Wall came down the firm failed to send that year’s order to my employer. He lost a lot of money and many customers over that, and had to lay me off, so I needed another income source to be able to continue my university studies.

The cadetship at the RBA was available; I might not have applied otherwise, because moving from Melbourne to Sydney hadn’t been on my radar until then. I came up to Sydney for the summer internship, completed my final year of university back in Melbourne with financial support from the Bank, and then started as a graduate at the beginning of 1991.

Twenty-six years later and I’m still here

Reserve Bank of Australia Building in Sydney
Reserve Bank of Australia Building, Sydney

Twenty-six years later and I’m still here, though I spent two years (2007 and 2008) in Basel, Switzerland, seconded to the Bank for International Settlements. (I did my Ph.D. part time while working full time.) The rest of the time has been spent in various policy-oriented and analytical positions around the Bank.

Prior to taking up my current role, I was head of the Financial Stability department for eight years. I came into that role just weeks after the peak of the global financial crisis. That period taught me a lot about leadership, decision-making under uncertainty, and the many considerations shaping public policy.

My role on a day to day basis

As Assistant Governor, I’m responsible for two departments: Economic Analysis, which provides the regular monitoring, forecasting and analysis of economic developments to support the Reserve Bank Board’s decisions on monetary policy; and Economic Research, which conducts longer-term research of a more academic nature to support the monetary policy and other policy functions of the Bank.

As well as providing overall guidance and intellectual leadership to the team, my role involves presenting the staff’s analysis to the Board each month, and being part of the Bank’s efforts in communicating with and being accountable to Parliament and the public. What this means day to day is a lot of reading, synthesising analysis, talking to team members about their work and dealing with the senior leadership and external parties.

Championing internal communities and embracing diversity within the Bank

An Executive Sponsor is exactly that, a sponsor and champion, not directly involved in the day-to-day leadership and management of that particular group or community. My role is to assist and guide, and – where appropriate – to be an advocate in the Bank’s Executive Committee.

Mathematica screenshot
Mathematica screenshot by HolyCookie (Own work) [CC0], via Wikimedia Commons
The specifics of my involvement vary with each group. I’m a strong believer in the importance of good business analysis skills in developing effective solutions. The Bank has a number of strategic initiatives underway with large IT components. It’s essential to understand the business requirements thoroughly to deliver effectively on those initiatives. I sponsor the Mathematica users group because I’m probably the longest-standing user of this particular product in the Bank, which has become quite strategic for our data analysis and visualisation work – a core output in a central bank.

I also sponsor the LGBTI+ allies Employee Reference Group because I’m a lesbian, and I believe it is incumbent on people in senior positions who come from any disadvantaged group to be advocates for diversity and role models for younger people.

The Bank has made great strides in embracing diversity in very recent times, which is already bearing fruit in terms of attracting the best talent and deepening employee engagement. The enthusiasm – and the sense of relief – that I’m seeing in the Employee Reference Group has been truly touching.

Accessing a range of different perspectives contributes to better problem-solving

Diversity is important on several levels. Firstly, if you aren’t attracting a diverse pool of candidates, you are missing out on many of the top candidates. Nobody seriously defends the idea that all or even most of the raw talent is to be found in one sex, or race or any other single group, so it must be that a team skewed to one group will be weaker than one selected on genuine merit.

Secondly, people from different backgrounds have different life experiences and so might make intellectual connections in different ways. This isn’t necessarily about the dimensions referenced in anti-discrimination legislation. For example, we’ve benefited from hiring people with diverse educational backgrounds – not just macroeconomics – including people who had careers in other fields before studying economics. Sometimes that’s because they can leverage their existing skills and training directly; sometimes it’s because accessing a range of different perspectives contributes to better problem-solving.

Encouraging more women to get involved in economics

Woman working with notebookThe male-dominated character of economics has been a long-standing issue and one that won’t be solved easily. Here’s what we do know, based on recent academic research: Data on career progression in US academia suggests that overt discrimination has disappeared from tenure and promotion decisions in most STEM (science / technology / engineering / maths) fields (Ceci et al 2014). Yet economics is an outlier – men in economics are more likely to be given tenure or promoted than women with the same publication records (Ginther and Kahn 2004, 2015), so a lot could be achieved simply by making genuinely merit-based decisions, as in other fields.

Over time, the role model effects would then start to kick in and economics would attract more female students. I don’t consider the field to be inherently ‘male’ and if anything, the way females are socialised in our society should spark more interest in fields framed around the public interest, including economics. Also, the example of other fields shows that quantitative or mathematical content is not a barrier once genuine merit-based selection starts to happen.

But we also know from the same research that married men in STEM had better publication records on average than either single men or married and single women. This might suggest that women do not receive the same kind of spousal support of their careers, and therefore that publication records might overstate the underlying abilities of married men in academia.

I fear that employers could do everything they can to eliminate unconscious bias and support flexible work and all the other things they do to encourage more diversity, and still end up with an overwhelmingly male-skewed profession. Part of the solution probably requires hard conversations between members of couples.

Career advice for economists

There is still a bit of a tendency for mediocre males to survive in male-dominated professions like economics, because they can stay under the radar in ways a mediocre woman wouldn’t. If you’re female in a male-dominated field (or a male in a female-dominated one, for that matter), you better be in it to be good at it, and you better be passionate about that field. If those things are true, you will be able to harness the grit you need to show in order to succeed.

To be honest, some of the best career advice I’ve received wasn’t specific to my being female. Probably the most important is to keep growing yourself and investing in your own skill development. This includes finding ways to do core work more efficiently. Don’t accept the line that ‘this is the way we’ve always done it’!

Another lesson I’ve drawn from the advice of others and my own experience is on the importance of communication. Being able to make sense of complex, quantitative evidence and articulate your conclusions clearly are core skills in economics and many other fields. There’s a lot of talk about data science nowadays, but more generally the world needs quantitatively literate leaders who can direct those data scientists’ work and interpret and communicate what they find.

One advantage of being in public policy rather than academia is that your career success and progression don’t rely on claiming individual credit for particular ideas. We know from recent research that women in academic economics tend not to get credit when they co-author with men (Sarsons 2016). In central banking, it’s more important to be strategic, join the dots between diverse ideas, engage with stakeholders and make good decisions under uncertainty. Understanding what you need to be able to do to succeed is the first step to getting there.

Harnessing the economic potential of fully utilising the skills and abilities of women in the workforce

SydneyAs for the economics profession specifically, the broader labour force would be better harnessed if employers ensured that they were making genuinely merit-based decisions. This means thinking clearly about the actual requirements of a role, instead of imagined ones that create artificial hurdles such as demonstrating an ability to work unnecessarily long hours. Workplace flexibility comes into that, as does adequate and flexible childcare. Part of the solution has to come from within couples, though. I know what it’s like to be a woman whose partner fully supports my career; not every woman has that luxury.

Coming up next for me and the Bank

It’s an uncertain time for the global economy, but it’s an exciting time for the Bank. The change of leadership is allowing the organisation to build on some of the cultural and structural changes it’s made in recent years. Some of the Bank’s strategic initiatives, such as the New Payments Platform and Next Generation Banknotes, are coming to fruition as well.

This year will be a big one for me, too. As well as the new role and shift of focus from financial stability back to monetary policy after ten years away from it, my wife and I are expecting our second child mid-year.

 

http://www.rba.gov.au/

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https://www.linkedin.com/company/reserve-bank-of-australia

 


Bibliography

Ceci SJ, DK Ginther, S Kahn and WM Williams (2014), ‘Women in Academic Science: A Changing Landscape’, Psychological Science in the Public Interest, 15(3), pp 75–131.

Ginther DK and S Kahn (2004), ‘Women in Economics: Moving Up or Falling Off the Academic Career Ladder?’, Journal of Economic Perspectives, 18(3), pp 193–214.

Ginther DK and S Kahn (2015), ‘Women’s Careers in Academic Social Science: Progress, Pitfalls, and Plateaus’, Boston University, January, unpublished manuscript. Available at [http://sites.bu.edu/shulamitkahn/files/2015/01/GintherKahn-SocSci-chapter.pdf]

Sarsons H (2016), ‘Gender Differences in Recognition for Group Work’, working paper. Available at [http://scholar.harvard.edu/files/sarsons/files/groupwork.pdf]

 

Image credit (main image of Sydney): By Beau Giles (http://www.flickr.com/photos/beaugiles/5245075698) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

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