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Australian Central Bank Lags Behind as Women Avoid Economics

RBA Assistant Governor Michele Bullock
Michele Bullock, assistant governor at the Reserve Bank of Australia, is the sole woman among the RBA's top eight officials. Source: Reserve Bank of Australia via Bloomberg

When Patricia Apps’s teenager was looking for career advice about becoming an economist, the professor of public economics at Sydney University advised her daughter to study law instead.

“It’s a boys’ culture,” Apps said. “If you look at economics from the prospective student’s point of view, you see women don’t succeed.”

The gender gap in Australian economics is reflected at commercial lenders, the Treasury and at the Reserve Bank of Australia, where Assistant Governor Michele Bullock is the sole woman among its top eight officials, and just three in 10 managers are female. That lags behind the representation from Asia to the U.S.: Half of the Thai central bank’s 58 executives and 44 percent of Federal Reserve board officials and managers are women, data from the institutions show.

Failure to fully use the “hidden resource” of women costs Australia’s A$1.4 trillion ($1.5 trillion) economy as much as 13 percent in lost annual production, Goldman Sachs Group Inc. analysts estimate. The glass ceiling for economists belies a nation where men are outperformed in most fields of higher education and where the prime minister, governor-general and mayor of the biggest city are female.

“The apparent lack of women in economics in Australia is not actually saying something about women, it’s saying something about economics in Australia,” said Luci Ellis, head of financial stability at the RBA, in a discussion on female representation with Bullock and Alexandra Heath at the bank. “When we travel in Southeast Asia, there’s a lot more women in senior roles in central banks.”

Treasury’s Imbalance

At the Treasury, which rivals the RBA as the nation’s premier economic institution, women account for less than a quarter of senior executives.

“For organizations like the Reserve Bank, like the federal Treasury, optimum performance comes from diverse teams, and that’s about both men and women,” Sex Discrimination Commissioner Elizabeth Broderick said in an interview. “We clearly haven’t got that at the minute.”

At three of the four biggest banks, Australia & New Zealand Banking Group Ltd., Commonwealth Bank of Australia and National Australia Bank Ltd., only a few economists are female. At the fourth, Westpac Banking Corp., there are none, even as Chief Executive Officer Gail Patricia Kelly helps lead a campaign for more women on government boards.

Westpac’s Effort

Ganesh Chandrasekar, general manager of human resources at Westpac, said the lender in November reached a goal of 40 percent of all senior leadership roles held by women, ahead of its 2014 target. He said the chief economist at St. George Bank Ltd., a subsidiary of Westpac, is a woman.

The higher proportion of women in the Thai central bank, where the previous governor, Tarisa Watanagase, is female, is reflected across much of Southeast Asia. Zeti Akhtar Aziz runs Bank Negara Malaysia, while Indonesia’s former Finance Minister Sri Mulyani Indrawati, who taught economics at universities in Indonesia and the U.S., is now a managing director of the World Bank.

The RBA says its hiring of women partly reflects the unequal proportion of economics graduates with honors degrees or higher. That ratio is further diminished as commercial banks poach the RBA’s female recruits to narrow their own gender imbalances, according to Bullock, assistant governor responsible for the central bank’s note division.

“I’ve observed over the years many, many very good women in this institution,” she said. “But boy they’re highly sought after out there.”

Hiring Competition

Competition for the small pool of female economists to try to even up employment ratios is prevalent throughout the industry, said Annette Beacher, head of Asia-Pacific research for TD Securities Inc. “In the last 12 months I’ve been approached for a job where the unofficial job specification is ‘we need to be seen to be hiring a woman,’” she said.

That demand isn’t reflected in the nation’s universities, where students completing post-graduate economics degrees in Australia were split 60:40 in favor of males in 2011, while undergraduates stood at 59:41, government data show.

In politics, Australia ranks ahead of the U.K. and U.S. when it comes to the representation of women in parliament, according to Inter-Parliamentary Union’s data on 190 countries. Australia’s 25 percent of women in the lower house and 38 percent in the senate puts it 41st internationally, compared with 22 percent in the U.K. parliament for 48th place and the U.S.’s 17 percent, ranking it 69th.

Childcare Barriers

Ellis, Bullock and Heath at the RBA say the caliber of women joining the central bank is high, but, as well as the loss of staff to commercial banks, other impediments remain for female staff trying to reach the upper echelons.

“In Australia, the cost of childcare is ridiculous,” Beacher said. “If we had a system like in Singapore, whereby you could hire full-time help at an affordable cost I think you’d see the participation rate rise by 10 percentage points.”

Singapore imports more than 200,000 foreign domestic workers from countries such as the Philippines and Indonesia -- about one for every five households. They work as live-in nannies and servants, typically earning about $400 a month, allowing many parents to work full time.

Australia ranked 44th for the proportion of working women, behind the U.S. and New Zealand, and ahead of the U.K., according to the World Economic Forum’s Global Gender Gap report.

‘Career Accelerant’

Commissioner Broderick said better employers use child leave to attract higher-caliber female staff “by ensuring that those women who come back from maternity leave are promoted. Smart organizations are using maternity leave as a career accelerant, rather than a career backward step.”

The debate on the role of women in Australia was reignited in October when Prime Minister Julia Gillard lambasted opposition leader Tony Abbott for “misogyny and sexism” in a 15-minute speech to Parliament that was viewed more than 2 million times on YouTube. The nation fielded its first female political candidate in 1897, decades before most Western nations even granted universal suffrage. Governor-General Quentin Bryce, who represents the head of state Queen Elizabeth II, and Clover Moore, lord mayor of Sydney, are women.

At the Treasury, where the entrance hall is adorned with photos of senior male executives, Secretary Martin Parkinson has set a target of 35 percent female senior executives by 2016, with a longer-term goal of 40 percent.

Aiming Low

“I don’t think 40 percent is particularly aspirational” as more than half the population is female, said Catharine Lumby, a feminist author and director of the Journalism and Media Research Centre at Sydney’s University of New South Wales.

The three top women at the RBA said progress will take time. In the U.S., 30 percent of respondents in a Bloomberg Global Poll last month said Federal Reserve Vice Chairman Janet Yellen would be a good choice to succeed Chairman Ben S Bernanke when his term expires in January 2014.

Asked how far Australia is from having a woman run its central bank, Bullock replied in deadpan country style: “probably a while.”

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