When women are introduced to economics, often the way economics is taught is a turnoff to them. And how important economics is to human welfare, they don't see that in an introductory economics class. So, you know, there just aren't enough women in economics and not enough women who see how satisfying a career can be.
Welcome to this podcast produced by the International Monetary Fund. In today's program, US Treasury Secretary Janet Yellen and IMF Managing Director Kristalina Georgieva celebrate International Women's Day and the age of womenomics. Secretary Yellen is the first woman ever to lead the US Treasury Department.
She has done what no man has achieved in the United States, a hat trick being the chair of the Council of Economic Advisers, chair of the Federal Reserve, and now the Secretary of the Treasury. No wonder that everybody's looking forward to hear from you, Secretary Yellen. And let me just say that we have chosen this theme, the age of womenomics, consciously. Never in my life have I seen so many women in key positions where core economics and finance matter. You as the Secretary of the Treasury, Chrystia Freeland in Canada, Christine Lagarde, my predecessor at the ECB, Ngozi at the World Trade Organization, the very first woman president of a multilateral development bank, Odile at EBRD. We have two women across 19th Street as chief economists of the World Bank and of the IMF. We are very proud with our own Gita Gopinath and we are very proud of Carmen Reinhart on the other side of the street at the front. We have a deputy managing director, fantastic, dynamic woman, Antoinette Sayeh, and we have grown our women in management by 20% over the last five years. Janet, I admit we still have some way to go to reach parity, but parity we will reach. So, welcome.
First, let me say what a pleasure it is to be with you on International Women's Day and to have a chance to talk about the progress that you describe that women have made in our profession. But unfortunately, we still have a ways to go. There is still too few women around the tables that you and I sit at. But it is wonderful to see the improvement.
Thank you, Janet. And if I may, I want to go into the first question and it is how you made your choice to study economics. I know that you did this at Brown after first intending to major in philosophy, and then you went to Yale and there you concentrated your PhD on employment and capital formation. You are very well known as a very strong labor economist. How did you make these choices and how having been concentrated on the impact of economic policy on people is helping you in your job today?
So I always understood I do care about people and wanted to do something with my life that would have a positive impact on people. And I discovered as a freshman in college that economics was a field that matters to human welfare. I think by way of background I tell you that my parents came of age and married during the Great Depression and I grew up hearing stories from them about the hardships that the Great Depression imposed on people. And my father was a family doctor and most of his patients were blue-collar workers, working-class people who were affected by the ups and downs in the economy. And his office was actually in our home and I got to know many of his patients. He would talk about their lives to me and my mother and my brother and he talked about the toll that unemployment took on his patients, the financial toll, the psychological toll, the toll on family life. So I think as a child growing up, unemployment and the job market I understood were really critical aspects of economic welfare. And then I went to Brown. I took my first courses in economics and I discovered that economics, and particularly at that time Keynesian economics, had an explanation for what it was that happened in economies or even globally that could lead to periods of very high unemployment which took a huge toll on human welfare and what could be done about it. And it was exciting to me. Monetary and fiscal policy were tools we could use to address high unemployment, that the world didn't have to suffer indefinitely through periods like the Great Depression. And I realized early on that was what I wanted to do for my life. And really that is what I've done for my life as an academic. I studied unemployment and business cycles. And then I had the incredibly rare experience, privilege to have served as chair of the Council of Economic Advisers, in various positions including chair of the Federal Reserve and now as Treasury Secretary. And throughout my focus has always been on trying to keep the economy operating as close to full employment as we possibly can and the benefits that that brings. But I went directly, you know, many young people now who study economics in college they take internships, do a research assistantship. I went directly to graduate school where I had the privilege to study with James Tobin who later won the Nobel Prize. I went there to study with him and he was one of the great American Keynesian economists. And I think what really inspired me about him was that he had a sense of passion for social justice. And you know, economics, as you know, it can be very mathematical. And sometimes in all the math, people lose sight of the fact that at the end of the day, this is about human welfare. It's about making people's lives better. And Tobin never lost sight of that. And he understood, I mean he too had lived through the Great Depression and he understood how important the performance of the economy as a whole is for human welfare and you know he was really a mentor to me and inspired me to study economics. I hope you'll tell me a little bit about how you became interested.
Well, in my case I studied on the other side of the Iron Curtain and in the early 80s I had to decide what would be my PhD field and at that time two things happened that influenced me to go into environmental economics. The first one was that there was a member of my family who got very sick because of groundwater pollution, completely preventable if we were to have good regulation and if we were to have access to information. And it cried for me that we have to have policies that are protecting people's health and that are allowing the economy to grow without these negative impacts. And the second reason was that I got at that time the need to define the value of my thesis by quoting a communist party congress document, which I didn't think was very research-oriented. So I said to myself what is it that the communist party said nothing about and it happened to be environment. But on a more serious note, Janet, what you said about your family coming through the depression, seeing people really so keen just to have a job, reminds me of my country Bulgaria during the 90s when our economy collapsed, hyperinflation, at my mother's life savings over a couple of days and I had to get up at 4:00 in the morning and queue to buy milk for my daughter which is so clearly a lesson as to bad policies are being paid by ordinary people's suffering and good policies can bring opportunities to everyone. So my message to my staff at the fund is policies are for people, for improving people's lives. And your point that we need to make it so clear that economics is not a dry science. It is actually an empathetic science, one that is about the livelihoods of people and the ability for society to do better.
I completely agree with you. It vitally affects human welfare and really studies trends and developments that have an enormous impact on the quality of people's lives. What they feel they can achieve and the opportunities that they have. And of course, your background in environmental economics is tremendously important now as we deal with the challenges posed by climate change and which something that is a critical global challenge that we're all focused on now.
And we take it to be at the heart of the work of the IMF now and in the future because we have to bring economic policy to help us both manage the risks of climate change but also capture the opportunities of green jobs and green growth. One of the issues that we want to bring to the audience today is we know that diversity of thought is very valuable and yet it is a persistent problem. We don't have enough women in economics and in fact in the last two decades the share of women in PhD in economics has stagnated. It's around 30ish percent. Yes, it is better than during your times in '71, you apparently were the only woman of about two dozen PhDs in Yale in economics, but it's stagnating. So what can we do about it? How can we open up more interest and bring more young girls to be seeing themselves to be the Janet Yellen of the future?
So that's a great question. Let me offer some thoughts and I'd be interested in what your thinking is on this as well. So first of all I think when women are introduced to economics and often they don't take an economics course either in high school or in college but when they do often the way economics is taught is a turnoff to them. And what you and I just talked about how important economics is to human welfare. They don't see that in an introductory economics class and they often or in disproportionate numbers go off to other fields. They're more attracted to sociology which they think really does concern how people live and interact and what determines human welfare. And so one thing I think we have to do the pipeline issue really starts early. And there are a lot of people now who are thinking about how can we teach economics in a way that shows women that this is a great field and it's a way to improve human welfare. And there are people like Claudia Goldin who's at Harvard who has a grant to do experiments around the country in undergraduate economics classes to see and to study these experiments to see what works. People are rethinking textbooks and ways in which textbooks are biased toward things that interest men rather than women and are rewriting those books. So that's one thing. A second thing I would say is that there's been an absence of mentors and role models. So, you know, there just aren't enough women in economics and not enough women who see how satisfying a career can be. You know, there's implicit bias against women. I read a paper recently. It was essentially an experiment. Someone had sent out emails to faculty members in an economics department. Some were clearly written by men and some by women. And the emails to the faculty requested just 10 minutes of time to talk about something. And the emails were identical. But it turns out that requests by women were ignored way more than requests by men. That's not the only thing that shows a kind of implicit bias against women. There was a New York Times article recently about the way in which women are treated in seminars versus men. And you know, my guess is that you and I have had the same experience which is that economic seminars can be pretty aggressive and it's not unusual when a person is giving a seminar for interruptions to start very early. But a really rigorous study that was reported recently in the Times showed that there's much more aggressiveness toward women. That typically a woman can start giving a presentation and before she's even through her initial slide, this is my topic and this is what I'm going to do in this seminar, somebody has said you've asked the wrong question and that data isn't relevant anyhow to the question. And so, you know, this does show up in a whole variety of ways. I think experiments and experience I think suggest that women enjoy collaborative environments more than aggressive environments. And you know, the more women there are in a workplace or in an economics department, the more collaborative and supportive it tends to be toward women. And you know, just having more women actually changes the culture. You know, I was president of the American Economic Association last year and we did a study. We surveyed women in the field to try to understand the culture and why there were so few women. And the results were really startling. They showed a huge amount of discrimination against women that people felt harassed. They felt the environment was often aggressive. They changed their behavior in ways that enabled them to survive it but were probably not good for their careers. And so one of the things that we did in response to this, we realized there's a culture problem in the profession and we need to change the culture. And we set up a task force on best practices and tried to give concrete suggestions to how leaders like ourselves in institutions like ours or in academic departments, what are some things they could do that would make the environment more positive to promote diversity and inclusion? And there are a lot of things that we're able to bring to the table. So, for example, and I saw this at Brookings, you know, before I came to this job, when it's time to have new PhDs through for recruiting season, the head of the economics group at Brookings sent us an email and said, I think as a practice, we should make sure that at least for the first 10 minutes of the seminar, we do not interrupt with hostile questions, only clarifying questions. So, you know, it's a simple suggestion. It's not so hard. Empowering bystanders who see bad behavior to act against it. Making sure when we have panels or we have conferences, making sure that there are women on the program. I mean, we have a host of suggestions and they're sitting on the American Economic Association website. I think that if they were widely adopted, the profession would be a more positive, provide a more positive culture for women. I'm sure you've thought about this too, Kristalina. I'm really interested in what your thinking is.
Well, there are two lessons I learned in my professional life. The first one is the danger of women trying to blend in in a male-dominated environment. Just flashed in my mind walking into the World Bank building in Washington for the first time. I was to give a seminar and I had a colorful jacket with flowers on it. I walked in the building, looked around, walked out, went and bought a dark blue suit so I can blend. But it is dangerous because what we want is diversity. We want women to bring ideas and perspectives that otherwise will not be in the conversation to emphasize topics that otherwise may be underrepresented in research. And so I told myself since then we need to create an environment in which everybody, men and women, feel equally comfortable and they can step up. So what does that mean? And this is the second thing I learned. There simply have to be more women in senior positions. And these women in senior positions ought to mentor other women to make sure that they create that sense of confidence for younger women to step up. I crafted a phrase that I repeat very often to women. I do bring our senior women together at the fund and what I tell them is don't be shy. Please apply because as you know women may be more self-critical and forgo opportunities to engage on issues on which they are the best or they have a lot to contribute including in management. So I think that you and I, people like me, we have a tremendous responsibility to bring up women and also to be as direct, as honest and direct as we can be. In fact, I'm going to ask you a question. One of our women economists at the fund is dying to hear from you. How do you handle setbacks? Because we do have that tendency to mostly talk about we broke a ceiling, we got somewhere further and faster, but we don't talk enough about what we have to overcome to reach this high. So, what would be your advice to women that may hit a wall? How to handle it? How to handle disappointment?
You know, I think we've all had that experience of hitting a wall and feeling disappointed even either over a small setback in a job or a larger failure. But you know what I've done in my own life, I think, is simply to move on. And I have the advantage, as I'm sure you do, I love what I do. I love the field. I really find it interesting. There are a lot of different things I can do, a lot of different paths to take. And if one thing doesn't work out, I look for something else that is a path forward. You know, I was an assistant professor at Harvard. Now, not very many people got tenure, but I was certainly one of the people who did not get tenure. And you know, was that a setback? I'm not sure. I didn't really expect to get tenure, but at that point, I decided I would do something different. And I came to the Federal Reserve. I joined the staff as a research economist. And I discovered how much I enjoyed doing public policy and how much I enjoyed monetary policy and international economics and applied issues. And it was a different path, but it ultimately really took me into a large part of my career that was started by my experience at the Fed. I wanted to come back. I understood what the Federal Reserve was doing and how I could contribute, what it was like. So, you know, not taking it too seriously. Everybody has setbacks and we have to move on.
