How Covid-19 Exacerbated Finance’s Gender Gap

Research shows that female analysts were more likely to get distracted from work when schools were closed.

Illustration by II (Bigstock photo)

Illustration by II

(Bigstock photo)

A new study of analyst productivity during the coronavirus pandemic shows how professional women have been disproportionately burdened by domestic responsibilities while working from home.

The study, conducted by University of Mannheim PhD candidate Mengqiao Du, examined the impact of school closures on the timeliness of sell-side analyst forecasts. Du found that female analysts were 9 percent to 16 percent less likely to issue timely forecasts compared to their male counterparts.

When Du divided the analysts into two groups, based on whether or not they had children, she found that women without children were not significantly impacted by school closures. The forecast timeliness of working mothers, on the other hand, dropped by up to 20 percent.

“The findings indicate that professional women are more likely to get distracted and have to reduce labor supply when the demand for childcare increases, compared to their male counterparts, which may eventually lead to the notable gender gap in competitive industries,” Du wrote.

Equity research, like most of finance, remains largely dominated by men, with Du noting that only about 10 percent of U.S. financial analysts are women. Female analysts also earn less than their male peers: Du said the gender pay gap amounted to $19,604 annually, citing data from the U.S. Bureau of Labor Statistics.

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“Even though female analysts are competitive women who choose and survive in this male-dominated industry… they are still more likely to be influenced by domestic burdens when the demand for childcare unexpectedly increases during the Covid-19 school closures,” Du wrote. “The gender gap imbalance in childcare responsibilities and domestic tasks may at least partially explain the notable unrepresentativeness of women and the existing gender pay gap in the financial analyst industry.”

Du found that school closures changed the hours that female analysts worked, with analysts shifting report release times to time periods that don’t coincide with intensive housework or childcare responsibilities. She also found that female analysts tended to ask shorter and fewer questions during earnings conference calls while schools were closed.

“On the bright side,” Du wrote, “the findings also imply that the gender gap in the job market may be able to get closed by alleviating the imbalance in housework allocation between gender or by providing better external childcare services.”