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Does it matter that certain people, or members of certain groups, are less likely to become economists?

The following table answers this question in terms of efficiency and equity. The left-most column lists three ways in which lower participation rates of certain groups affect our society: 1) Allocation of people to particular professions; 2) Generation of ideas and analyses within disciplines; and 3) Government Policy. The middle column identifies the potential inefficiency of outcomes, from proximal to distal. The rightmost column identifies potential sources of inequity. Information in this table is from Bayer (2013).

Efficiency Effects Equity Effects
In allocating people to professions

Wasted talent, if our methods dissuade some students who would have had productive and fulfilling careers in economics

Unfair opportunity, if not everyone has an equal shot at experiencing the joys of being an economist, a satisfying and useful occupation

In generating ideas and analyses within the discipline

Inaccurate and incomplete analyses, since "sound economic analysis benefits from a broader range of perspectives and experiences in the profession" (Collins, 2000)

Inaccurate and incomplete analyses that encourage continued inequality, if economic analysis undervalues factors that systematically disadvantage members of underrepresented groups, such as nonmarket production, discrimination, and social norms

In making government policy

Policies that cause inefficiencies (e.g., analyses that neglect the value of nonmarket production or the persistence of institutional discrimination)

Policies leading to inequity: "Economists are the ones running the Federal Reserve Bank and making everyday decisions that will determine or even undermine the qualify of life of millions of African Americans." (Rhonda Williams)

Reading list:

MAY, A. M., MCGARVEY, M. G. and WHAPLES, R. (2013), Contemporary Economic Policy. doi: 10.1111/coep.12004. Abstract: The authors survey economists in the United States holding membership in the American Economic Association (AEA) to determine if there are significant differences in views between male and female economists on important policy issues. Controlling for place of current employment (academic institution with graduate program, academic institution—undergraduate only, government, for-profit institution) and decade of PhD, the authors find many areas in which economists agree. However, important differences exist in the views of male and female economists on issues including the minimum wage, views on labor standards, health insurance, and especially on explanations for the gender wage gap and issues of equal opportunity in the labor market and the economics profession itself. These results lend support to the notion that gender diversity in policy-making circles may be an important aspect in broadening the menu of public policy choices. (JEL A11, J78, A14)

Kamas, L., Preston, A., & Baum, S. (2008). Feminist Economics, 14(3), 23–50. Abstract: This paper uses dictator experiments to examine gender differences in altruistic behavior in the United States when decisions are made individually and jointly. In anonymous individual giving to charity, women give substantially more than men, and in paired settings, mixed-sex groups give the most while all male pairs give the least. Evidence supports social information and negotiation effects as participants change giving toward that of their partners. Social image effects are found only in mixed-sex groups, indicating a gender-based component to the value of the social signal sent. Although men and women appear to have similar influence, the positive social image effect pushes giving in mixed-sex pairs above the sum of the members' individual gifts because the less altruistic partners (usually men) adjust their giving upward more than the more altruistic partners (usually women) reduce giving. Therefore, increasing women's participation in traditionally male spheres of decision making may result in more altruistic economic behavior.

Sander Hoogendoorn, Hessel Oosterbeek, and Mirjam van Praag. Management Science 2013 59:7, 1514-1528. Abstract: This paper reports on a field experiment conducted to estimate the impact of the share of women in business teams on their performance. Teams consisting of undergraduate students in business studies start up a venture as part of their curriculum. We manipulated the gender composition of teams and assigned students randomly to teams, conditional on their gender. We find that teams with an equal gender mix perform better than male-dominated teams in terms of sales and profits. We explore various mechanisms suggested in the literature to explain this positive effect of gender diversity on performance (including complementarities, learning, monitoring, and conflicts) but find no support for them.

Hoogendoorn, Sander; van Praag, Mirjam. 2012. Abstract: One of the most salient and relevant dimensions of team heterogeneity is ethnicity. We measure the causal impact of ethnic diversity on the performance of business teams using a randomized field experiment. We follow 550 students who set up 45 real companies as part of their curriculum in an international business program in the Netherlands. We exploit the fact that companies are set up in realistic though similar circumstances and that we, as outside researchers, had the unique opportunity to exogenously vary the ethnic composition of otherwise randomly composed teams. The student population consists of 55% students with a non-Dutch ethnicity from 53 different countries of origin. We find that a moderate level of ethnic diversity has no effect on team performance in terms of business outcomes (sales, profits and profits per share). However, if at least the majority of team members is ethnically diverse then more ethnic diversity has a positive impact on the performance of teams. In line with theoretical predictions, our data suggest that this positive effect could be related to the more diverse pool of relevant knowledge facilitating (mutual) learning within ethnically diverse teams.

Book description: "In this landmark book, Scott Page redefines the way we understand ourselves in relation to one another. The Difference is about how we think in groups--and how our collective wisdom exceeds the sum of its parts. Why can teams of people find better solutions than brilliant individuals working alone? And why are the best group decisions and predictions those that draw upon the very qualities that make each of us unique? The answers lie in diversity--not what we look like outside, but what we look like within, our distinct tools and abilities." Reviewed in Ioannides, Yannis M. 2010. "A Review of Scott E. Page's The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies." Journal of Economic Literature, 48(1): 108-122.

  • Engendering economics: conversations with women economists in the United States by Paulette I. Olson and Zohren Emami. (New York: Routledge, 2002)

This book presents interviews from female economists who received Ph.D.s between 1950 and 1975, a period in which very few women were studying economics. From the book description: "Their post-war experiences as family members, students and professionals, illustrate the challenges that have been faced by women, including both white and African-American women, in a white male dominated profession. Engaging and insightful, the impressive scope of philosophical perspectives, career paths, research interests, feminist inclinations, and observations about the economics profession and women's place within it, will appeal to anyone interested in economics, sociology and gender studies."

  • Ruffins, Paul. (1996) Black economists: an 'elite clan of warrior intellectuals. Black Issues in Higher Education 13 (19). [1]

Abstract: Black economists feel even more isolation and frustration than many African American academics and PhDs, because they continually confront the contradictions between economic theory and blacks' daily experience. The proportion of African Americans with PhDs in economics is very low relative to the undergraduates who study economics or have degrees in related fields of business administration or accounting.

Quotes from the article: "the African-American community, as a whole, suffers when there aren't any African-American economists at the conference table when important decisions are being made." "Once upon a time there was a little girl who wanted to know why some people had jobs and others didn't, so she took a course in economics. The textbook said that if you went to school and did the right things, you'd get a job. But she said, `that can't be right. I have four cousins in Chicago who finished school, who finished training programs, and who still don't have jobs.' So she studied some more."

  • Krugman, Paul. "How Did Economists Get It So Wrong?" The New York Times. [2]

Quote: "The economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. Until the Great Depression, most economists clung to a vision of capitalism as a perfect or nearly perfect system. That vision wasn’t sustainable in the face of mass unemployment, but as memories of the Depression faded, economists fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets, this time gussied up with fancy equations...Unfortunately, this romanticized and sanitized vision of the economy led most economists to ignore all the things that can go wrong...economists will have to learn to live with messiness."

  • Colander, David. "The Making of an Economist Redux." (Princeton: Princeton University Press, 2007).

From Book Description: "Updating David Colander and Arjo Klamer's classic The Making of an Economist, this book shows what is happening in elite U.S. economics Ph.D. programs. By examining these programs, Colander gives a view of cutting-edge economics--and a glimpse at its likely future. And by comparing economics education today to the findings of the original book, the new book shows how much--and in what ways--the field has changed over the past two decades. The original book led to a reexamination of graduate education by the profession, and has been essential reading for prospective graduate students."

  • Holmes, Jessica and Colander, David. (2007). "The Making of an Economist Redux." Middlebury College Economics Discussion Paper 07-25. [3]

Abstract: This paper reports on the findings of a survey of top economics graduate schools as they relate to women and men. The results provide strong evidence that at these top graduate schools, women graduate students are less integrated in their economic disciplines than are male graduate students. In the second part of the paper, this paper relates those findings to alternative theories as to why this is the case. This paper concludes by suggesting that the emphasis on theoretical studies in the current core of the graduate economics program can be seen as a type of hazing process that seems to have a significant cost since many women (and men) with great creative promise are discouraged from continuing in economics and do not benefit nearly as much as they would have from more policy-driven core courses.

  • McCloskey, Deirdre. "Bourgeois Dignity: Why Economics Can't Explain the Modern World" (Chicago: University of Chicago Press, 2010).

From Book Description: "The big economic story of our times is not the Great Recession. It is how China and India began to embrace neoliberal ideas of economics and attributed a sense of dignity and liberty to the bourgeoisie they had denied for so long. The result was an explosion in economic growth and proof that economic change depends less on foreign trade, investment, or material causes, and a whole lot more on ideas and what people believe.

Or so says Deirdre N. McCloskey in Bourgeois Dignity, a fiercely contrarian history that wages a similar argument about economics in the West. Here she turns her attention to seventeenth- and eighteenth-century Europe to reconsider the birth of the industrial revolution and the rise of capitalism. According to McCloskey, our modern world was not the product of new markets and innovations, but rather the result of shifting opinions about them. During this time, talk of private property, commerce, and even the bourgeoisie itself radically altered, becoming far more approving and flying in the face of prejudices several millennia old. The wealth of nations, then, didn’t grow so dramatically because of economic factors: it grew because rhetoric about markets and free enterprise finally became enthusiastic and encouraging of their inherent dignity."