Lael Brainard: Strengthening diversity in economics
Speech by Ms Lael Brainard, Member of the Board of Governors of the Federal Reserve System,
at the Conference for the 2017 Summer Training and Scholarship Program, sponsored by the
American Economic Association and the National Science Foundation and hosted by the
Department of Economics, Michigan State University, East Lansing, Michigan, 28 July 2017.
* * *
I am grateful to John Maggs for his assistance in preparing this text. The remarks represent my
own views, which do not necessarily represent those of the Federal Reserve Board or the
Federal Open Market Committee.
Let me begin by expressing my appreciation to the American Economic Association (AEA), the
National Science Foundation and the other organizations and institutions sponsoring this
conference, which for nearly 20 years has focused attention on the benefits of diversity and the
need for continued progress in ensuring that the best and the brightest have the opportunity to
advance and contribute to the field of economics. I want to especially thank Lisa Cook for giving
me the opportunity to be here today.
I am particularly pleased to be able to speak with students participating in the AEA's Summer and
Mentoring Programs. At the Fed, we share the goal of making sure the group of students who go
on to practice economics look more like America. So if you are interested in pursuing
economics, we want to make sure you have an opportunity to contribute to the field.
Perhaps more than any other profession, it is in the DNA of economists to believe that equality of
opportunity is important not only as a matter of fairness, but also to our country's vitality. In
addition, economists like to base conclusions on hard numbers. The numbers make clear there
is a persistent lack of diversity in the economics profession, which indicates we are falling short
of our ideals.
The quality of the economics profession and its contributions to society will be stronger when a
broader range of people are engaged. We now have substantial empirical evidence documenting
the benefits of diversity in broadening the range of ideas and perspectives that are brought to
bear on solving problems, and thereby contributing to better outcomes, both in research and in
policy. Studies suggest that increased diversity alters group dynamics and decisionmaking in
positive ways.
As Amanda Bayer and Cecilia Rouse have noted, microeconomic experiments and other
research have confirmed these ideas. One experiment found that greater racial diversity helped
groups of business students outperform other students in solving problems. And another found
similar benefits from gender diversity. A study of 2.5 million research papers across the sciences
found that those written by ethnically diverse research teams received more citations and had a
1
greater impact than papers by authors with the same ethnicity.
Diversity in the economics profession will bring important insights into the analysis of our
economy and financial system and help policymakers make better decisions in promoting a
healthier economy. So given that diversity in the economics profession is an important goal, how
have we been doing? Unfortunately, by any measure, we are still falling short. Between 1995 and
2014, the share of women obtaining a doctorate in economics held roughly steady in the
neighborhood of 30 percent. Among U.S. citizens and permanent residents earning doctorates,
the representation of those identifying as black, Hispanic, or Native American among the pool of
doctorate recipients improved from 6 percent in 1995 to 11 percent in 2007. But the improvement
has since unwound and the underrepresented minority share stood at about 7 percent in 2014.
I respectfully defer to others who have more closely studied the mix of possible reasons for why
progress has not been greater, but I will defer to no one in expressing my view that the status
quo is not good enough. I've laid out a number of arguments why policy and society at large
would be better off if there were more women and minorities in the economics profession. But a
more important question for the students here today might reasonably be, what's in it for me?
One answer is that there are a ton of interesting questions out there for you to solve. Another is
the considerable premium in earnings over other academic fields.
Even for those students here who are not convinced that a career in economics is ultimately the
goal for you, the intellectual framework associated with the study of economics is extremely
powerful and applicable to a host of other areas. And who can say now how your career will
unfold? I would encourage you to think expansively about your career trajectory. Some of you
may already feel that economics is your calling and you may choose to go directly into graduate
school with the aim of pursuing doctoral studies. Others may decide to work for a few years and
then make a choice about graduate studies once you know more about what kind of job is likely
to be most appealing and hopefully have made a dent in your student debt. Just as many people
choose to leave the field of economics and pursue other interests at different junctures in their
careers, so too there may be multiple points of entry. There are many stories of successful
careers in economics that began only after other avenues had been explored. I want to make
sure you know that even if you have not specialized in economics as an undergraduate, it is not
too late to join. We need economists with diverse experiences and backgrounds, just as we need
other sources of diversity.
For what it is worth, I did not major in economics as an undergraduate, and I worked for several
years in the private sector before I decided to pursue a doctorate in economics. I am glad I did. I
enormously value the intellectual framework associated with economics, and my career has
provided terrific opportunities both to range far afield and to work within the field. In short, I hope
you will think of economics not as shutting doors on other opportunities, but rather as equipping
you to pursue a whole new set of opportunities.
Given the benefits I have described to the profession and society from increasing diversity in the
ranks of economists, as well as the opportunity a degree in economics affords to individuals who
pursue the field, it makes sense to look closely, as the AEA and others continue to do, at the
reasons more women and minorities do not concentrate in economics in college or depart from
economics as they move toward graduation. To the undergraduates in the audience today who
are participating in the Summer Program, I would be interested to hear what you believe may be
discouraging women and minorities from choosing economics in school and careers, so that we
can take steps to reduce any barriers.
The AEA and other groups are rightly focused on what universities and other institutions can do
to promote diversity in economics. Let me now direct my attention to diversity at my institution,
the Federal Reserve, because it is both one of the largest employers of PhD economists in the
country and a prominent public institution. The share of women and minorities among
economists at the Fed is similar to the numbers for the profession at large, and these numbers
have likewise improved fairly little since 2009. Something that has changed over that time,
however, is the elevation in importance of diversity efforts, including recruitment. The Board of
Governors is making considerable effort to recruit and retain economists who are women and
minorities.
We are working hard at recruitment at the earliest stages of the career-formation process. Every
year the Board hires 50 to 60 research assistants (RAs) for two-year terms; the 12 Reserve
Banks together hire roughly an equal number. Our research assistant program is to some extent
an apprenticeship program for economists and also for financial analysts and those in related
fields. Our research assistants are typically recent college graduates and most are at least
considering further study of economics. These are sought-after positions because our RAs have
the opportunity to work with the Board's leading economists on both research and work that
directly supports policymaking.
For the Summer Program students here today, I would encourage you to explore the RA
program. Serving as an RA either at the Federal Reserve Board or at one of the Reserve Banks
has proven to be a good way to learn more about the profession and prepare for graduate
school. I can report that five graduates of last year's program are now working at the Board as
RAs and several are working at Reserve Banks.
For the Federal Reserve System, our recruitment of RAs is a great opportunity to give a wide
range of potential newcomers some exposure to what the career pathway of economics looks
like. While not all RAs go on to further economics education and training, a considerable share
do, and thus our diversity efforts have the potential to significantly affect career pathways later
on. Indeed, at the highest levels of that process, the Federal Reserve under Chair Janet Yellen
and with the strong support of the Governors and Reserve Bank Presidents is committed to
increasing diversity among the top-ranking staff at the Board and among leaders of the Reserve
Banks.
In the tradition of the discipline of economics, I have cited empirical support for the argument that
diversity is good for economics. I know from my own personal experience we can and must do
better, and in that spirit I want to tell you about one of my experiences that might resonate with
some of you here. When I served at the Treasury Department for President Obama, one of my
responsibilities was to represent the United States in the Group of 20 (G-20) deputy ministers of
finance and central bank officials. At one of our negotiating meetings, the nearly 50 officials
gathered for a group photo. When this photo was distributed to each of us as a memento, it
caused a bit of a stir. I remember a colleague from another delegation doing a double take when
he looked at the photo. He turned to me and said "Did you realize you are the only woman in this
group?" I had indeed already noticed that. And I am happy to say that his delegation added a
woman after that.
Since that time, we have seen some particularly noteworthy milestones. At the time, there had
been only one woman among the G-20 countries serving as head of a central bank, in South
Africa, and none among the G-7 advanced economies. Since then, two other women have led
G20 central banks, and now I have the honor of serving with the first woman to lead the Federal
Reserve, Janet Yellen.
So what's my take away from that experience? It was a good reminder to me that we have to see
the challenges that are right in front of our eyes if we want to address them and we should not be
satisfied until the people sitting around every decisionmaking table look like America in all its rich
diversity.
Earlier this year, the Federal Reserve Bank of Atlanta hired Raphael Bostic as its president and
chief executive officer, the first African-American to lead a Reserve Bank. I look forward to the
day when we have moved far beyond all the firsts, when we can see with satisfaction that the
people of the Federal Reserve fully reflect the characteristics of the American people. We are
working hard to get there, but we still have a long way to go.
Of course, getting to that point in the future starts with people like you and the paths you choose
today. You should choose the path where you feel you will make your greatest contribution-the
one that is right for you. But if economics seems like a great fit, then choose it with the
confidence that you have the capacity to make an important contribution that will be valued.
So with that, I will be glad to respond to your questions.