There’s Another Massive Gender Gap in Finance — But There’s Hope

Women are hugely underrepresented among finance faculty at the top business schools, according to new research. But the picture is improving, the authors found.

Illustration by II

Illustration by II

The gender gap is alive and well in finance academia — but it’s taken a surprising turn in recent years, according to new research.

A review of finance faculty from the top 100 business schools in the U.S. from 2009 to 2017 revealed that a paltry 15.8 percent of them are women, according to a draft paper, entitled “Female Representation in the Academic Finance Profession,” co-authored by Mila Getmansky Sherman, a professor of the Isenberg School of Management at the University of Massachusetts Amherst, and Heather Tookes, professor of finance at the Yale School of Management.

There’s a salary gap, too: For a subsample of public institutions for which the authors had available salary data, women were paid 4.3 less than men during the same period. Indeed, Sherman and Tookes found evidence of a “historical disadvantage of women in finance.” After controlling for productivity, the authors found that women tended to work for “lower-ranked institutions” and were less likely to be tenured than men, in addition to being paid less.

But the researchers also uncovered a pleasant surprise: The disadvantages facing women in academic finance “disappeared” during the later years of the study.

In their paper, Sherman and Tookes identified other factors that explained the gender imbalance in academic finance.


One is that women tend to publish less than their male colleagues, according to the research — and in the publish-or-perish world of academia, this takes a direct toll on their job prospects. The authors found a productivity gap of 16.3 percent for women, in spite of the quality of the work being equal, as measured by the authors’ analysis of the top publications in the field.

Also, women tend to appear less frequently as co-authors than men, meaning that they either publish research on their own (which is more time consuming and labor intensive than co-authoring research), or they co-author publications with other women. Since the available pool of women with whom to co-author papers is so much smaller than the pool of men, this reduces their opportunity to publish, which partly explains the productivity gap.

“Women have less of that traditional ‘boys network’ — so they have less opportunity to coauthor with others, and that leads to less publication, and that leads to less tenure,” Sherman said in a phone interview with Institutional Investor. “It’s a vicious cycle.”

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However, the authors found that for women in academic finance, the picture has improved in recent years.

“In the last years of our sample, the evidence that women are at lower-ranked schools; are less likely to have tenure; or receive lower wages disappears entirely,” the authors wrote.

Among more recent graduates in the sample — those faculty who graduated from PhD programs in 2009 or later — productivity, and not gender, explained most of the variation in where the faculty member was employed, whether they had tenure, and whether they exited the profession.

And those changes are happening at the same time the authors observed another trend: more women are entering the profession and getting tenure. For example, 9.5 percent of faculty who had tenure during the entire 2009-2017 sample period were women. But of the faculty who obtained tenure during the period, 23.8 percent were women, while 19.6 percent of “rookie new hires” were women.

“Given the importance of coauthored publications and research networks, these increases, although slow, do suggest an improved outlook for women in finance going forward,” the authors wrote.

Sherman explained to II that the closing of the gender gap in the later years of the sample may be due in part to schools proactively addressing the problem.

“It’s coming all the way from chair and dean and provost level, the support to hire women,” she said. “Let’s say we have a position open, and you bring only men [to interview], that is unacceptable. You need to bring enough qualified women and minority candidates — that comes all the way from the top.”

She added that funding provided specifically to hire women and minorities has helped, as has training for implicit biases. And the outlook for women will continue to improve, as long as more women are accepted into PhD programs for academic finance.

“We need to have more women in PhD programs, try to mentor them early on, and give them confidence to say ‘Hey, I can do it,” she said, adding that she hopes more women will join the ranks of finance academia. “It’s a great field, it pays well, and you can have a huge impact.”