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Whether you agree with her or not, it’s fair to say that Federal Reserve Chair Janet Yellen has based U.S. monetary policy decisions and efforts on economic metrics and fundamentals, keenly mitigating any perception of gender-based biases. However, as the keynote speaker at Brown University’s most recent conference on Women at Brown, Yellen shared her thoughts and experience on women in the economy and the gender differences that still impact our society. She began her story on women in the workplace at the end of the 19th century, at the time when only 54% of school-aged women in the U.S. went to school. By the 1930s the labor force participation rate was almost 50% for single women, but only 12% for those who were married. As they became more educated and workplaces began to offer jobs deemed suitable for them, the participation rose steadily reaching 74% of women between 25 and 54 years of age during the early 1990s. Nevertheless, Yellen stressed that progress had stalled since then. The participation rate has fallen (see graph below), and women working full-time earn 17% less per week than men. Some of this has to do with the types of jobs, but Yellen said that "even when we compare men and women in the same or similar occupations who appear nearly identical in background and experience, a gap of about 10 percent typically remains." She concluded with suggestions on improving access to affordable quality childcare and developing working styles that enable women to better meet their duties at work and with their families.

I would add that companies should increase leadership opportunities for women as a way to improve their bottom-line. A 2013 Harvard University study concluded that the net profit margin was significantly stronger in companies with boards that had at least three women directors. A 2014 Credit Suisse study found that more women in management coincided with better corporate performance and higher stock market valuations. In recognition of this, investment companies have launched vehicles such as the Pax Ellevate Global Women’s Index Fund and SPDR® SSGA Gender Diversity Index ETF ("SHE"), alternatives for investors we track closely. SSGA went further placing a bold symbol, a statue of a Fearless Little Girl representing the importance of women in leadership in a location that no one can ignore, in front of the bull on Wall Street, on the International Women’s Day. After all, market performance is many times the best test of impactful ideas.

by Myrna Rivera, CIMA®
Founder & Chief Executive Officer

Graph 1

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