Why Can’t We Close the Gender Gap?

(gentle piano music)

It’s more than 50 years since the US outlawed wage disparities based on gender, yet women earn, on average, about 84 percent of what men earn, according to the Pew Research Center, and while the gender pay gap has narrowed since the 1970s, progress has stalled since about 2006. So why does the gender pay gap persist?

Is it down to not enough women being in positions of power? Only about 5 percent of big American companies have female CEOs. Is it more to do with how society values traditionally female and male characteristics, or does it simply reflect the durability of discrimination?

Welcome to The Big Question, the monthly video series from Capital Ideas at Chicago Booth. I’m Hal Weitzman, and with me to discuss the issue is an expert panel.

Marianne Bertrand is the Chris P. Dialynas Distinguished Service Professor of Economics at Chicago Booth. She’s codirector of Booth’s Social Enterprise Initiative and director of the Poverty Lab at the University of Chicago Urban Labs. She’s also a coeditor of the American Economic Review.

And Waverly Deutsch is a clinical professor of entrepreneurship at Chicago Booth. She teaches Building the New Venture and coaches startups at the Polsky Center for Entrepreneurship and Innovation. Her research focuses on the execution challenges entrepreneurs face as they grow their businesses.

Panel, welcome to The Big Question.

Marianne Bertrand, let me start with you. Why has that narrowing of the gender gap slowed down in recent years?

Marianne Bertrand: That’s a million-dollar question. I think no one has a definitive answer. I think there’s been a huge amount of progress in terms of narrowing this gap over the 1980s that has been kept, keep on going, but certainly at a much slower rate.

I think what’s more dramatic if you look at the distribution of earnings between men and women is that the gap at the top of the earnings distribution, so between the top-earning man and woman, is not being, narrowing much at all over the last two or three decades.

Hal Weitzman: So the top earners, the men are—

Marianne Bertrand: Yeah, I think in terms of convergence, if you look at median earnings, I think the patterns of convergence have been stronger in this part of distribution, and I think what looks more strange and harder to explain, maybe harder to explain, is what’s going on at the top of the earnings distribution.

Hal Weitzman: OK, Waverly Deutsch?

Waverly Deutsch: I think what’s interesting to think about is we know, sort of, some of the causes for the gender gap through the 1940s, ’50s, ’60s, ’70s, when institutionally, it was implemented based on roles in the organization, based on the value of women, and certainly, when I was coming up in my career, it was very rare for women to make the same amount of money as a man for the same job.

I think as we’ve shown light on that issue, as women in the workplace have changed, the dynamics around why women make less have shifted dramatically. So it’s much less a story about a lack of opportunity or a systemic sort of holding women down, the glass-ceiling question. There’s still some of that. It’s particularly pervasive in areas that are heavily male-dominated like financial services, tech, things like that.

What’s really interesting now is the role that women, women’s socialization, and how women approach their careers is playing in being one of the elements that might cause that gap to be persisting and also make that last, that last part of the gap harder to close.

I could pose the challenge kind of differently. I think looking back in time, when people were trying to explain the gender gap in earnings, it was always an easy explanation to point out, which was gender difference in terms of education. You know, women were not going to college the same rate as men. They were much less likely to go to business school, law school as men. What has been happening in terms of education is exactly the reverse of that. Now women are more likely to enter college than men. They are more likely to complete college than men, and gender differences in terms of the representation of women in business school and law school, while they’re still a bit less than 50 percent, this has pretty much evaporated as well.

So I think they puzzle now has become how do we explain gender difference in earnings, while there’s no longer a gender difference in terms of education, in fact, the opposite of that?

Hal Weitzman: OK.

But to go back to your point earlier, Waverly Deutsch, so you don’t think that it’s women not getting it, not being able to get into positions of power. Does that mean, then, that it’s women getting into those positions and not being paid as much when they’re in them?

Waverly Deutsch: Well, I think that as Marianne pointed out, the higher you rise, the more that gap persists. We know that women can get into positions of power. About 5 percent of Fortune 1000 CEOs are females. So it’s not a question any longer of “It’s not available to you.” The path is different, and the dynamics of how women climb the corporate ladder are different than the dynamics of how men climb the corporate ladder.

So it is a really interesting question that once women get there, what’s going on with compensation, and what’s causing that?

In the middle, I think in the middle management, in the pipeline to the C-level, women have a very different approach to business. So women are far less likely to want a job in the C-level when they’re interviewed at middle-management positions. They’re far less likely to say that that’s a career goal of theirs. They’re far less likely to ask for promotions and ask for pay raises. They’re less likely to change jobs for career advancement. They typically change jobs for other reasons than getting a bigger title or getting bigger responsibility.

So part of the interesting question is: What drives the socialization of women, and you know . . .

Marianne Bertrand: I’m not sure what you mean by the socialization of women. I think we have, if I have to take my perspective, kind of looking back at all the research that’s been done on this, I think we have a pretty good explanation as to why women are not advancing at the same rate as men, and it’s the fact that women do something different at home than the men do.

I think children are a huge part of the explanation, and the story, I think, is a pretty simple one. I mean, if you think about the high-earnings job in the economy, think about jobs in finance, jobs in business, jobs in law, they are jobs that require extremely long hours. They are jobs that are characterized by a total lack of flexibility in the allocation of time. You have to be there seven days a week. You have to be available seven days a week. And because we still live in a society where women do a disproportionate share of the home production, by which I mean child-rearing, that’s a big part of it, but other things. The ability to be that, be the mother or be the person that takes care of the home, and have those inflexible careers is extremely difficult.

So I think it’s not that women do not want to get to the top. I think because of the role that they play outside of the workplace, the role that they play at home, these jobs are just less appealing for them because they cannot combine them with what they do at home.

Waverly Deutsch: I think you . . .

(talking over each other)

Marianne Bertrand: So I don’t know what it is, what you mean by socialization because then we can have a whole discussion as to why this is like that. And maybe that’s what you meant by socialization. I want to make sure that we’re on the same route.

Waverly Deutsch: I think you answered a big part of that question, and that is the socialization of women still being the primary caregiver in the home. The primary caregiver with aging parents, primary caregiver with children, and quite frankly, the primary caregiver in mixed-gender households. Yes.

So I consider that part of the socialization, but I also think that ambition, competitiveness, these kinds of traits are—and there’s a huge debate on . . .

Marianne Bertrand: we can this whole—

Waverly Deutsch: —nature versus nurture.

Marianne Betrand: Yes, it’s exactly right.

Waverly Deutsch: But there’s certainly aspects of the way kids, even today, grow up in society. I mean, we’re getting more and more women participating in competitive sports, but competitive sports have always been an area where ambition, competition, those kinds of leadership traits have been developed.

Marianne Bertrand: So we can, well let’s break it down, right? So I think we are trying to explain this gender gap. We are in a situation where we can no longer point out education differences is what explains it. So we have to look for something else, and I think the main stories are left outstanding is this issue about women take the greater care of the load outside of the workforce at home.

And there is a set of other explanations that have to do with different risk attitudes for women. Women may not have an appetite for these very risky jobs. Women may not have an appetite for the competitive natures of a job on Wall Street, and then when you look at this other kind of explanation, attitude toward risk, attitude toward competition, those have been documented to exist, and it might very well be that they are part of the same phenomenon as what I think you called socialization before, which is that we raise our girls not to have an appetite for risk because they should be at home taking care of kids, and we raise them not to want to win the race because that’s not the way we conceive the role of women in society.

And I think the research on that, this nature versus nurture research on this attitude, I think, is really not definitive at all. But I think we have some evidence, for example, that girls that kind of get raised in the single-sex schools tend to be more competitive, more risk-taking than girls that are in, kind of, raised in a coed environment. So they’re pointers that says that those attitudes, those preferences for risk, competition, may not be something that we are born with, but something that we are nurtured to become as women.

Waverly Deutsch: And that’s exactly what I meant by socialization.

Marianne Bertrand: And then we have socialization, now we’re done.

Waverly Deutsch: And I think one of the things that we probably have to do is we probably have to stop calling this a problem, right? So a problem requires effects.

Marianne Bertrand: It is a problem.

Waverly Deutsch: And there may be some disparity in pay that isn’t about equal pay for equal work but that is a disparity in the median earnings that have to do with other things, so women valuing flexibility and flex time and vacation time, and trading that off for financials. And I think if we do some research in how that rolls into pay gaps, we see a smaller pay gap.

But this issue of taking on risk is exactly what we see in the world of entrepreneurship. So there’s a lot of press on the fact that women get less than 20 percent investment, some say even as low as 4 percent of the dollars of venture capital go to women founders, and the truth of the matter is, that only about a fifth of the venture-backed companies even have a woman on the founding team; and yet, women are starting businesses at a much closer rate to men, and women own 30 percent of the businesses in the country.

What they do when they start businesses is they work for a work-life balance, and so they tend to start . . . they’re much less likely to start employer businesses versus sole proprietorships, self-employment, so 30 percent of the companies, privately held companies in the US are owned by women, but only 15 percent of those are employer companies. So they’re much less likely to start employer companies. And they’re much less likely to start companies that have high degrees of capital requirements up front, and like you said, that are in these really competitive spaces.

So the challenge, the interesting challenge is to then find the women who are in those areas and figure out a way to make sure that they have the tools they need and the support they need to go and ask for the capital to grow those businesses. So that’s a number that’s been climbing slowly, the way women in the executive suite of Fortune 1000 has been climbing slowly, and part of it is because of what the women are doing themselves as entrepreneurs.

Hal Weitzman: But Waverly Deutsch, when you talk about choices and women, sort of, you said there’s not necessarily a problem. Does that mean there’s a kind of a natural wage disparity that we just have to live with?

Waverly Deutsch: No, there isn’t a natural wage disparity, and we have to consider compensation across more dimensions than just money. There is a value of money disparity, and whether that’s a good thing or a bad thing I don’t think is something that we can really answer.

But here’s what I would say to Marianne’s point about the aggressive, right, the aggressive risk-taking, high-risk jobs, high-performing jobs, what we have to look at is when a woman is following the same career trajectory, are there factors that are holding her back from earning what her male counterparts are earning? And I think we absolutely still have tons of anecdotal evidence and, I believe, evidence in the salary data itself that women are making less than men when they’re doing exactly comparable work.

And I’ll give you an example. I was recently talking to a Booth grad who’s reached the upper echelons of a consulting career, and in her review, her boss told her, “You talk too much about your family, and it’s perceived that that’s gonna hold you back from climbing the ladder here.” And she thought about the amount, she talked about her family versus her male colleagues, couldn’t find a difference, and also, she asked her boss, “Was there ever a time when I wasn’t with my team when I needed to be, when I missed a critical meeting when I needed to be, when I didn’t take on travel or work that I needed to be,” and he couldn’t cite that. And so it was a pure perception issue, and he was concerned about the perception and he brought it up, and he would never do that with a man.

And I think there are those kinds of issues that are problems and do need to be dealt with.

Marianne Bertrand:I think those perceptions are important. I think this is just one data point. I think if you look at the entirety of the data, which I’ve done in prior work on our MBA students, but there’s been other similar studies have been done for law schools, other business schools. You have a pay gap between male and female graduates, that is, at about 10 years out of grad school, 50 percent. So our male graduates, 10 years out of grad school, earn 50 percent more than our female grads.

You can explain 95 percent of that 50 percent by simply accounting for differences in labor supply between men and women, by which I mean that in the career that we send our students to, long hours, very long hours, get very high rewards. For reasons that’s, I think, part of what we need to explain is that why, you know, kind of, do you have to work 70, 80 hours a week to be successful on Wall Street? And we can have a discussion about that. But these long hours are extremely valued, and in the kind of careers that we send our students toward, taking any kind of time off, six months’ time off for whatever reason, whether you’re a man or woman, is gonna hurt you a huge amount.

So if you look at this 50 percent pay gap 10 years out of completing your MBA, you can explain 95 percent of that pay gap by simply accounting for the fact that our female students are more likely to have taken that six months’ time off. Gosh, they had kids. And they work shorter hours a week than the men do, and as I said, those very long hours get very, very sharp rewards.

So we prepare our students, and that’s not only true for business schools and law schools, they’ve got the same problem. Medical schools are different. We can talk about medical schools. But for the job that we prepare our students for, same for the law school, these extremely long hours are valuable, and because the woman gets to take the greater share of the load outside of the workplace at home, cannot as easily work those long hours, they get to earn much less.

And I agree with you, after that, that you hear stories about women get discriminated against. Women get told they should not be talking about their kids, and these perceptions and all that. I think all these things are true, but I think it’s really important when we try to make progress on these questions, to really highlight where the core problems are. And I think, I think the evidence now really points toward this lack of flexibility in the career tracks that we prepare our students for, same for the law schools, and that’s really what’s hurting the women.

So if I think about solving this problem, I think there’s really two solutions. One is that the firms on Wall Street, the consulting firms change the model that they use for work. We need a change in the production function, and maybe it is indeed impossible to replace one consultant that works 120 hours a week with two consultants that work 60 hours a week, and we cannot do that. If that’s true, if there’s no way to change the production function for those jobs, then I think the only solution if we want to achieve more equality in earnings between male and female will be to change the norms, to change their view that when a kid is born, the woman is gonna be the one picking up the phone when there’s something happening at school. That the woman is gonna be the one taking care of the kids in the middle of the night. I mean, we cannot outsource breastfeeding to the guys, but lots of the other things could change, and I think the only way we can make progress if there’s not gonna be a change in the production function will be by just moving the gender attitudes, moving the gender norms. That women are not gonna be, should not viewed as the one responsible for the greater share of what happens within the home.

Waverly Deutsch: So I’m gonna disagree with you that the anecdotal data isn’t relevant because I think the anecdotal data is very relevant, and I happen to live in a world where—

Marianne Bertrand: We have error terms in regression. I mean the anecdotes belong in the error terms, and sometimes the error term is narrowing off that we’re gonna say we can ignore it.

Waverly Deutsch: But I happen to live in a world where I know a lot of same-gender households. And so, very often, when you would say one woman has the primary breadwinner role and the other woman is the mother, this woman is still pointed at as, you know, being too invested in the family. So that the reality of the care levels at home and the hours that can be committed . . . and I also know a lot of single women who put in as many hours as men, and so, you said maybe 95 percent of the pay gap can be explained by the fact that women take time off during their careers, and I absolutely agree with that.

I think that there are enough women who don’t do that that we can say that there is still, there are still other issues at play.

Marianne Bertrand: No, I’m just, kind of, I think if we want to make progress, I think it’s important to try to kind of isolate where the big chunk of the problem is. I’m not saying there’s no other issue. I’m not saying there’s no discrimination against women in the workplace. I’m not saying that all this issue about women cannot negotiate, all these things are irrelevant. I think they’re important, but I think if you look at the data, I do not believe at this point in time that they are the bulk of what should be concerned with. I think the bulk is really around these questions of flexibility and asymmetries within the household in terms of who’s doing what and who’s taking care of what.

Hal Weitzman: Marianne Bertrand, your solution is this, kind of, big societal change.

Marianne Bertrand: Yeah!

Hal Weitzman: And which is fair enough, but it’s a big project. Is there something small, is there a public-policy solution that can help?

Marianne Bertrand: There’s a public, I mean, if you think about, kind of, the countries that have been the most creative on this issue, I mean, you have to look at Scandinavia, and Scandinavia has been moving toward trying to bring more of the fathers in the family policies.

So Scandinavia is being . . . incentivizing fathers to take time off at the time kids are being born. And you could say, “How long is it gonna take for the norms as described before as being kind of big part of problem to change?” I don’t know how long it’s gonna take, but it might just be a matter of a generation.

I mean, I was recently giving this seminar in Stockholm, and some of the faculty members there, just an anecdote, but I think a relevant one, just had a kid and felt the pressure of not taking time off was too huge. Like their colleagues would look at them the wrong way were they not to stay at home with the newborn, and we’re talking about a policy that was introduced 15 years ago. So you can see that even a very short amount of time, public policy may help in moving those norms in the right direction.

Hal Weitzman: OK, Waverly Deutsch?

Waverly Deutsch: Yeah, I think public policy is probably more effective in countries like the Scandinavian countries than it is in the US, where we tend to have more of the pressure power be the corporations themselves, right? So if corporations can discover productivity gains to be had by encouraging men to do more work in their families, and that would correspondingly allow their female employees to be more productive, right, I think the pressure’s gonna have to come from corporations.

But what Marianne’s talking about in terms of the means of production is absolutely applicable to entrepreneurship. So if you’re in a venture-backed company, and you’re not 100 percent dedicated 24 hours a day, 100 percent available to that company, the venture investor feels like you’re cheating with their money. And so the same issues that Marianne was talking about, the pressure to be 100 percent available for your job, are the same pressures that high-expectation women entrepreneurs face.

The challenge there is those women who are willing to deliver that are also seeing the men not believing, especially if they’re young and in their childbearing years, not believing that they’re going to be willing to do that. So you know you have the public-policy shift, you have the corporate shift, but one of the problems in entrepreneurship, as in corporations, is your senior management tends to be of a generation that was pre- the policy, was pre- sort of the new socialization. So investors in this country tend to be middle-aged men, right, who have an experience of women being less productive in the workplace because they took time off to have children

And so, even though women are taking, apparently, less time off to have children and less time out of their careers, right, that shift in perception also has to take place.

Marianne Bertrand: Yeah, but I think that the changes in terms of educational achievement that I described early on are gonna play an important role here. I mean, at some point, if what’s happening in terms of educational trend, which means that women are the ones that are getting educated continues at the same rate, I mean, the companies will have to start being creative about how to make sure they attract this female talent, retain it, and create the conditions that make these women as productive as possible because they won’t have as many men to choose from.

Hal Weitzman: Waverly, you talked about 5 percent of women, and we mentioned it in the introduction, 5 percent of companies in the US, big companies, have women CEOs.

Is that enough, or is there a kind of a tipping point by which you know, but, can you get enough women leaders and—

Marianne Bertrand: (laughing) I think the answer was yes or was no, I think.

Waverly Deutsch: No, that is not enough and it is—something of a leading question. And it’s not a tipping point, right? I mean, 5 percent is not a tipping point.

Hal Weitzman: So what would be a tipping point where you kind of have (mumbles).

Waverly Deutsch: The challenge is the pipeline, right? So as Marianne was talking about, the pipeline thins itself during women’s childbearing years because they decrease their emphasis on their careers, and it’s hard for them to get back into that track at a later date. So you have to increase the pipeline up to the top in order to be able to meaningfully change the number of women at the top. And people often say, “Well, if it’s so hard for women to do . . . climb through the corporate ladder,” and most CEOs, most C-level executives, have spent substantial time at their companies, or in similar companies before they get to be in that position, “Well, shouldn’t women just start their own companies and isn’t that the fast track to CEO?”

And so, I think that the alternative path of having more powerful women CEOs through venture capital is a good one if the venture capitalists, if the private-equity firms, if the investors, trust those women. So there’s substantial, I’ll call it popular data out there about the correlation between a higher number of women executives and success, and there’s anecdotal data from Dow Jones and others about: having a woman founder leads to higher success for startups, right, having more women executives on your team leads to higher success for corporations in terms of relative return on equity for their shareholders, having more women on the board. So we have this popular data, I’ll call it, not scholarly data, but popular data, and that data doesn’t seem to be having a lot of an influence. So our numbers are creeping up, but the very people that you would think would be paying attention to shareholder return on equity, they don’t do it.

Now, I think, one of the big—

Marianne Bertrand:I think, can I just say something, I mean, it’s why I think this data is all there, I think, basically, finds correlation between more diversity at the top of organizations and performance, is lots of reasons for which this would not be a causal relationship.

I actually, personally, kinda keep on hearing those stories, and every company wants to say this and that exist, and it’s important. I think we should take this question much more seriously. I think we should actually try to research this question about whether or not there are benefits of diversity for businesses, and maybe once there will be more credible evidence on, indeed, having more women on the top of an organization is good for the organization. Once we have robust evidence of that, maybe there’ll be more of an incentive for organization to be more diversified.

Waverly Deutsch: While I want to encourage the academics of the world to do that research, but I think one thing that we can directly correlate to more diversity is a broader network of talent, a broader network from which to hire. So this question of once you have a woman on your executive board, her network is much more likely to include highly qualified, highly experienced women. And it’s much easier to recruit women to that board, or same thing in the executive team. We know from talent management that the broader our network, particularly in the entrepreneurship space, the more diverse a pool that we can draw from for entrepreneurial employees, the better the performance.

And so I think even at the popular-data level, the diversity of networks is definitely one area where having women involved on your founding team or in your corporate board is an area where you’re gonna naturally have access to greater talent pools.

Marianne Bertrand: In terms of that particular questions, I mean, one can point at, a few studies have been done, again, I’m gonna go back to Scandinavia, which are countries where they’ve forced companies to have more companies on their boards, and hence, kind of created—

Hal Weitzman: More women on the board. More women on the board, sorry, and have created the conditions to be able to draw from these broader, kind of, broader talent pools.

I don’t think that the evidence has been overwhelming, far from that, that this has been good for company performance. So and again, I am not saying that I do not believe it, I’m just saying that one should be careful by throwing around the idea that diversity is good for business. I think this is a question that we should seriously research. I think if we had better evidence, maybe—and the answer might very well be yes, but I think if we had better evidence, I think there will be much more appetite by businesses to actually go and try to get more diverse.

Hal Weitzman:I was gonna ask about your research, actually, about when you mandated, I mean, forget about the bottom line, does it really work?

Marianne Bertrand: Well, I mean, again, so the quotas, Scandinavian and more recently, Germany, have passed quotas, forcing between 30 and 40 percent of women on the board of large corporations.

The only study that has been done about the implications of this in terms of reducing the gender gap is the work that we’ve done last year looking at the Norwegian experience. And again, all of this should be caveated by the fact that it’s only been 10 years, so if you think that these policies are gonna have an impact on gender gaps, you’d think that it might take a bit more time. So with the caveat of only 10 years of data to look at, I think when one tries to understand the impact of these policies, it’s not very positive. I mean, there’s good aspects, so I’ll start with the good aspects.

Once you start putting . . . once you start kind of forcing businesses to put women on their board, even though the business, in the Scandinavian case, the German case, all the other European countries’ case where this has happened, lobby against these policies by saying there’s no way we can find talented enough women to serve on this board. The evidence clearly shows, in the Norwegian context, which I’ve analyzed it, once they start looking for women, they can find the women, right?

And so once you’re being told, “Well, you need to put 40 percent of women on the board,” you start putting the effort into looking for them and they find them. And what we find in the Norwegian case is the women that are appointed to the boards after the companies are forced putting the women, actually are better in quality than the women that were on the board before, the few women that were on the boards before.

Now that’s really good, because it means that the quotas are not just saying, “Well, you know, balance the boardroom in terms of bodies,” but the boardrooms also look more balanced in terms of the quality of the people, and that’s great.

Now, that’s kind of like the only good news, right, and then one has to look at this within the context of if the goal with this quarter is to achieve more gender diversity overall in business, one has to realize that the number of people serving on boards is very, very limited. It’s true in Norway. Germany’s a bigger country, but ultimately, we’re talking about a thousand women overall that have been directly affected by this policy.

So if you think these policies are gonna be important, you have to think that there’s gonna be spillovers. So once you have these women in the boardroom, they’ll find more women in their network that could be serving in the C-suite or slightly below the C-suite, and we’ve looked for that, and we found no evidence for that. Again, within the caveat of 10 years.

So there’s no evidence that there’s more women entering those companies and now have more women on their boards because they were forced to by the quota. Now you could think that the board positions will be inspiring to other women in the economy, whether or not they work at companies that now have diverse boards. We looked for evidence of that. We found no evidence for that.

We also looked at the next generation. Maybe those young women in Norway that now see that there are more women on the boards of big companies will want to be doing, you know, carrying business, or will think differently about trading off early fertility for staying on the career track. Again, we find no evidence there. And so, I think the message is really mixed, is that there’s the quota, there’s a mechanical effect of the quota. It’s more than just the mechanical effect in that the boardrooms become more equal in terms of quality of the men and women that are on the board. The companies are looking for quality women and they find them, which is great. But if you look beyond that, we find no evidence of change.

And I think the big danger with the quotas is that there’s a sense that “All right, we’ve checked the box. We’ve done it, all right, so we have a policy in place,” and I think the big danger is to say that we can do this and then we’re home, and there’s no more problem to solve.

Waverly Deutsch: So the problem that I have with academic research is they found that this one incredibly great thing happened from the quotas, and that was that when the companies went out to look for highly qualified women, they found them, and the quality of the women on the boards increased, but because they weren’t unable to prove—

Marianne Bertrand: No, no, no, no, no, no, no, no, no.

Waverly Deutsch: —another hypothesis, that’s bad news.

Marianne Bertrand: I thought it was very clear.

Waverly Deutsch: Yeah, yeah, no, you were very clear.

Marianne Bertrand: We made it a, you know, I think it’s a great success, and I think this has been, as I said, the main lobbying argument of the companies has been, “We will not be able to find those women.”

Waverly Deutsch: Right, and I think the other issues, I think you rightly said, 10 years is a very short period of time to look for impact on, say, younger women aspiring to board positions or the increase of pipelines.

I think it would be really relevant to look 10 years out, 20 years out, at the percent of women employees in the companies that have more women on their boards, and to study that in a longitudinal way. So I would suggest that we don’t really know the answer.

I mean, I think that we don’t like to solve problems with quotas just by checking the box, but I do think that once diverse talent is in the door, it’s easier for organizations to bring more diverse talent into the door. In other words, people tend to hire people who look like them, feel like them, and come from their networks, and that’s been pretty well proven.

Marianne Bertrand: No, again, so this is where, I think, one has to be very careful. A lot of these arguments about putting more women in the boardroom will help because of this homophily point, some of the best research, sorry, it’s just like, but some of the best research has a hard time finding that this homophily stuff really works.

There’s some fantastic work looking, it’s a different context, but looking at entry exams, I think, into law careers in Spain, where a candidate is being interviewed by a panel and there’s randomness between whether or not there’s a woman on the panel, and whether or not they’re interviewing female candidates, and what they seem to find is that once you put a woman on the panel, the female candidates do more poorly relative to the male candidates.

So it’s just, again, is homophily possible? Most likely, but is it, do we have to just say, for sure, homophily will work and women will help other women, I think one has to be careful. You know what, I—

Hal Weitzman: On that note, unfortunately, this is a fascinating conversation, but our time is up. We’ll have to come back in 10 years and review what progress has been made.

My thanks to our panel, Marianne Bertrand and Waverly Deutsch. For more research, analysis, and commentary, visit us online at chicagobooth.edu/capideas, and join us again next time for another The Big Question.

Goodbye.

(gentle piano music)