Friday, October 17, 2014

Risky Business: How Environment Affects Women's Decision-Making

The concept of risk as a major factor in decision-making has been thoroughly examined since the 2008 financial crisis began. In this week’s WAPPP Seminar, “Risk in the background: How Men and Women Respond,” risk was examined using the lens of gender to better understand the causes and effects of the choices individuals make. Alexandra van Geen, a 2014-2015 WAPPP Fellow and Assistant Professor at Erasmus University's School of Economics in the Netherlands, discussed her research on the effect that gender has on risk-taking in different contexts.

While acknowledging that previous research states women are generally more risk averse than men, Professor van Geen pointed out that this assumption is based on experiments involving isolated risks. Decisions to take risks rarely occur in isolated situations, however, due to the fact that there is both background risk (current risk) and realized risk (past risk) to consider. Instead, van Geen sought to measure the effect that gender has on risk in more realistic decision-making situations.

In a study conducted at Harvard’s Decision Science Laboratory, 160 students split evenly by gender were placed in an experiment where a third party threw a die to determine each student's payoff. To simulate what van Geen refers to as “background risk,” each participant had a 50% chance of receiving either $2 or $30. In addition, there were two fixed sum groups, one that received the low payout of $2 and one that received the high payout of $30, automatically.

Some of van Geen’s findings confirmed what many already understand to be true about gender and risk: as a baseline, women are more risk averse and less risk-seeking than men. However, van Geen found that women take more risks after receiving the fixed sum or with the presence of background risk, i.e. the roll of the dice in the experiment.

This reduction in risk aversion can be explained by women's sensitivity to the income effect, as in, the potential to earn money without risking a loss. In fact, the effect of income and potential income from past wins (via winning in the dice roll) eliminated gender differences in risk-taking altogether. One potential explanation for this is that women are more sensitive to income because of their higher baseline risk aversion. Additionally, men may narrowly frame a decision and not consider past or present risk in the same way that women do.

The income effect does not explain all the behavior around risk, however, van Geen argued. The effects of the experience of winning in and of itself was also examined. Winning produces several outcomes: (1) emotion, (2) subject expectations (i.e. belief an individual will keep winning once they have, or "gambler's fallacy"), and (3) an elevated level of hormones, namely testosterone. This study found that men increased their risk-taking after winning, despite the fact that there was no apparent income effect on men, indicating that it was the experience of winning itself that altered future behavior.

From these experiments, van Geen concluded that women experience an income effect that reduces risk aversion, while men don't experience an income effect at all. This effect is transient, however, and women eventually return to their baseline risk preferences. The presence of background risk also decreases women’s risk aversion but not men’s, which can also be explained by the effects of income and potential income. Lastly, men increase risk-seeking behavior after winning, while there is no effect for women.

Risk can have serious impact on decision-making, which in turn affects policy, van Geen argued, closing with a few potential policy implications of her research. Policy changes could encourage women to make riskier microfinance investments that lead to better outcomes, while behavioral nudges could discourage male day traders from being overconfident and seek too much risk after a win. Understanding how context affects gender's relationship with risk may help us close these micro-gender gaps, which could then chip away at larger inequities.

Wednesday, October 15, 2014

Hannah Riley Bowles on NBC's TODAY Show

This weekend, WAPPP research director, Hannah Riley Bowles appeared on NBC's TODAY Show to discuss Microsoft CEO, Satya Nadella's comments about how women should not ask for a raise.

“It’s not really about asking for the raise, but knowing and having faith that the system will actually give you the right raises as you go along.”

Hannah shares the research: that women are hesitant to ask for a raise in large part because of this type of social backlash. Until organizations and systems are fixed, women can overcome this bias by employing relational accounts when asking for a raise.

Watch Hannah's piece here:




Thursday, October 9, 2014

The Contingent Power of Women in African Armed Groups

This week’s WAPPP seminar, “Rebel Queens and Black Diamonds: Gender Politics in African Armed Groups,” was named after two female rebel fighters, Rebel Queen of Sierra Leone and Black Diamond of Liberia. In the seminar, WAPPP fellow Zoe Marks discussed the research on gender politics within rebel groups that led her to these women, primarily with Sierra Leone's Revolutionary United Front (RUF).

Through her field work in Sierra Leone, which experienced a brutal civil war from 1991-2002, Marks found that 17% of women reported experiencing sexual assault in their lifetime, which she argues is likely an underestimate. However, Marks discussed how these statistics have created a paradigm in which women are victims and men are perpetrators that has led to the dominant discourse over sexual and gender-based violence. While sexual violence in Sierra Leone varied over time, it was less common than other forms of abuse, and women also participated in the violence.

Women and girls make up 10-30% of non-state armed groups worldwide, which is a much higher rate than in state militaries. Marks hypothesizes that this is due to the fact that rebel groups use broad based recruitment because they need all the people they can get. In addition to serving as soldiers and spies, women carry supplies and work on base producing and cooking food. They are also the wives and girlfriends of the male fighters, though a significant number of the relationships are forced and oftentimes violent, as was the case with the RUF.

To try to better understand the social-organizational context for women in rebel groups, Marks looked into the sources of female power in the RUF. She found that power largely existed on the individual level, not in groups or networks of women. As is traditional in Sierra Leonean culture, age and marital status contributed significantly to a woman's status in the group. Martial status, i.e. whether a woman was trained in warfare and had weapons herself, could also elevate her position. Marks argued that though some women were able to obtain military dominance, this rarely translated into political power once the conflict has ended. Instead, it was largely the commanders’ wives who were invited to peace talks.

She added that gender relations within rebel groups varies greatly, ranging from the Eritrean People’s Liberation Front, with its progressive stance on gender equality, to the Lord's Resistance Army in Uganda. Made famous in 2012 by Joseph Kony, LRA uses marriage as a reward for commanders and to clamp down on immoral behavior, with the understanding that civilian rape hurts the public image and mission of the group.

Marks closed by citing research from Hudson et al, which listed the micro-aggressions of global gender inequality as (1) lack of bodily integrity and physical security, (2) lack of equity in family law, and (3) lack of parity in decision-making. Marks argues that these issues aren't actually that micro; they all help explain women’s experiences in war and gender politics in rebel groups, both in western Africa and worldwide.

Thursday, October 2, 2014

Making the Law Work for Working Women

When Sarah Iqbal, currently the Program Manager for Women, Business and the Law at the World Bank, first started working on development issues there in 2008, she says she often found herself explaining why the obstacles women faced when trying to start businesses and get jobs mattered on a global scale. Now, she says, there aren’t enough data to meet the demand for such information.

In this week’s WAPPP Seminar, “Women, Business and the Law: Removing Restrictions to Enhance Gender Equality,” Iqbal discussed the findings of the Women, Business and Law 2014 Report. The report scrutinizes the laws and regulations across the globe that affect men and women differently so as to limit women’s opportunities and incentives to work.

In a survey of 143 economies, 90% were found to have at least one legal difference restricting women’s economic opportunities. The restrictions came in a variety of forms, from property rights restrictions to long lists of jobs that women were prohibited from doing. 15 of these countries had laws allowing husbands to object to – and therefore restrict – their wives’ employment.

The study looked at seven indicators of gender economic equality to make these determinations: (1) ability to access institutions, (2) property use, (3) whether there were restrictions on type of employment, (4) whether incentives to work are provided, (5) ability to build credit, (6) court accessibility, and (7) the degree to which women are protected from violence.

The report found that there were three main obstacles for women’s advancement in business. The first is women’s lack of autonomy to interact with government institutions or conduct official transactions. Iqbal illustrated this by discussing “head of household” rights and responsibilities, such as paying taxes or sending children to school, which are usually delegated to men.

Second, Iqdal explained that marriage is often the trigger for such loss of rights. While single women have as many rights as single men in almost every country studied, women give up some of their autonomy upon marriage in many countries around the world. Lastly, limited property rights are a major factor contributing to women’s restricted economic opportunities, since property can be used as collateral for loans to start small businesses, for example.

Fortunately, there is hope that progress is being made on this issue. Within five years of the ratification of CEDAW, rates of reform in the countries studied had doubled. The report also found that having women legislators increased the likelihood of reform in that country. Over the two year period examined, Women, Business and the Law recorded 59 legal changes in 44 economies. Of these changes, 48 increased gender parity, 11 were neutral to gender parity. None reduced gender parity.

In addition to collecting this data, Women, Business and the Law are working with countries to make their laws less restrictive for women's economic opportunities. Iqbal closed by arguing that “what gets measured gets done,” and that despite the clear challenges ahead, a good first step is measuring the problem in order to tackle it.

Photo source: The World Bank

Thursday, September 25, 2014

Are Two a Crowd?

Supreme Court Justice Ruth Bader Ginsburg has discussed how she was often confused with Sandra Day O’Connor when they sat on the Court together, despite not looking alike and holding significantly different ideological views. It’s important to note that this mistake was not made by passersby being interviewed on late night television but by the lawyers arguing before the Court itself.

This is one of many examples that Professor Denise Lewin Loyd employed at this week’s WAPPP seminar, "Are two heads always better than one? Stereotyping of minority duos in work groups," to explain the unique problems that individuals who are part of the minority on boards, task forces or committees often face. Loyd, an Associate Professor of Business Administration at the University of Illinois at Urbana Champaign, argues that in many cases, being part of a minority duo on a larger team is even worse than being the only minority.

Past research indicates that single minorities within a group are often subject to “token pressure,” whether in the form of increased visibility, stereotyping or pressure to assimilate. Loyd conducted a study of 228 students on the issue, which concluded that this token pressure leads to discomfort, demonstrating that it’s a negative experience for the minority groups in question.

Though we might assume that token pressure would decrease when another minority member is added to the group, there is evidence to the contrary. Research featured in the Harvard Business Review even suggests that the presence of two women on a board may be seen as a subgroup and that those individuals have to give extra care to not look like they're conspiring.

Professor Loyd tested this hypothesis via an experiment she conducted with colleagues Mary Kern of Baruch College, CUNY and Judith White at Dartmouth. Using avatars, Loyd et al collected responses from 170 male participants to see how they viewed women in different settings in which they were the minority. Participants were asked to read a narrative involving a female employee who was part of a team where she was (1) the only woman, (2) one of two women or (3) one of three women on a team of seven, ten or 14. The decision-making and production tasks assigned were relatively agnostic so as to control for the fact that certain tasks may be perceived as more masculine or feminine.

Loyd et al found that women were viewed as significantly less potent and marginally warmer as part of a duo than while acting solo. While there are some limited situations where warmth is advantageous, being perceived as less potent is a clear negative. As part of a trio, women were not seen as less potent but were perceived as marginally warmer than as a duo. A second study involving female-minority groups performing a complex task revealed that men gave female duos worse performance evaluations, despite no significant difference in completion time and quality.

This research suggests that there is something uniquely negative about being part of a minority duo in a larger group. The phenomenon could be partly explained by the claim that minority duos make the category to which they belong more salient to the greater group. This could be a concern for women, who while still significantly underrepresented on corporate boards and in public office, are slowly gaining ground.

Thursday, September 18, 2014

How ‘No’ Can Get Women to the Top

For the past decade and a half, scholars have examined why American women are in very few corporate managerial positions compared to their male counterparts, despite representing 30% of elite MBA programs. The disparity is usually explained in several ways: (1) women have different job preferences, (2) women and men have performance differences when it comes to managerial tasks (i.e. women aren’t as good at these jobs), and (3) women face discrimination in the workplace, which prevents them from getting to the top. Recently, however, some researchers have begun to explain the problem with a bit more nuance.

Lise Vesterlund, an Economics Professor at the University of Pittsburgh, discussed an alternative theory based on research she conducted with coauthors Linda Babcock and Laurie Weingart, both professors at Carnegie Mellon University. In this week’s seminar, Breaking the Glass Ceiling with “No”: Gender Differences in Declining Requests for Non-Promotable Tasks, Professor Vesterlund looked at the assignment of undesirable tasks to better understand the issue.

She based her research on the premise that employees who accept more non-promotable tasks are promoted less often. A survey she conducted among MBA students indicated that women were more likely than men to accept such tasks, largely due to fear of the professional consequences of saying "no." As an economics professor, Vesterlund wanted to look at both the potential demand and supply side causes of this gap. The demand side is whether women are asked to perform non-promotable tasks more often than men, while the supply side is women’s response to such requests.

In a study involving freshmen and sophomores at Carnegie Mellon, Vesterlund et al placed students in random, anonymous groups of three, where they were tasked with hitting a button to make an “investment” that benefitted every member of the group, but gave the least to the individual who actually hit the button. This action represented a non-promotable, undesirable task in a corporate setting that needed to be completed despite no one wanting to do it. In a second part of the study, students had to ask another member of their group to hit the button for them.

The results revealed that both the demand and supply sides of this issue were to blame. While the vast majority of students pressed the button in the last possible seconds of each round – revealing that they were likely motivated by desperate self-interest and not altruism – women pressed the button significantly more often than men. In the second part of the study, Vesterlund also found that both men and women were more likely to ask a woman in their group to hit the button. In response to this, female participants complied 75% of the times that they were asked, while male participants’ decisions were split 50/50.

Vesterlund argued that since beliefs about women’s propensity to accept non-promotable tasks are central to this problem, women saying “no” more often might actually make a significant difference. She also suggested that some simple institutional changes, such as random assignment to event planning, committees, and other undesirable tasks, could allow women to take on more promotable assignments.

Friday, September 12, 2014

The Work-Family Narrative and How It's Hurting Women

Gender inequality in the higher echelons of the corporate world has made the news a lot lately – from the UK to Nigeria to Ireland, but the discussion at this week’s WAPPP seminar, "The Work-Family Narrative as a Social Defense: Explaining the Persistence of Gender Inequality in Organizations," focused on the discrepancy in American professional service firms. Despite large gains at the associate level of such organizations, where female employees now comprise roughly half of the workforce, women are severely underrepresented in elite positions. According to the 2013 Catalyst Census, only 15% of C-Suite executives in Fortune 500 companies are women.

Robin Ely, a Professor of Business Administration and Senior Associate Dean at Harvard Business School, presented her research and hypothesis on why such inequality persists. She and her coauthors Irene Padavic and Erin Reid conducted interviews with 107 professionals in a mid-size global consulting firm, where 90% of partners were male. Most employees surveyed said they believed that the inequity was due to the fact that women are disproportionally affected by personal obligations, which can hold them back in a corporate environment where 70-hour weeks are common.

This idea isn’t new; it has been circulated in the news media for over a decade since it was first prominently discussed in a 2003 New York Times Magazine article titled, “Why Don’t More Women Get to the Top? They Choose Not To.”

Professor Ely has an alternative hypothesis, however: that this phenomenon is caused by overselling and over delivery (i.e. overpromising) on the part of partners, paired with associates’ compliance in order to stand out as strong employees.

This creates a 24/7 work culture within elite firms that makes it virtually impossible to balance one’s personal and professional lives, for both men and women. Instead of addressing this culture head on, Ely et al argue that employees use a social defense (a collective arrangement used by an organization to protect against threats and conflicts) to fend off the anxiety this conflict causes.

This social defense splits the professional and personal spheres and then projects the latter onto women. By psychologically assigning women to the private sphere (what Ely calls “privatizing women”), organizations perpetuate the idea that women will prioritize their personal life over their professional one, making them less able to take on management work.

Unfortunately, policy changes may not be enough to resolve this pervasive issue. For example, many elite firms have improved their family leave policies, but women still overwhelmingly use these policies compared to men. Ely argues that a shift in culture is needed, paired with dialogue that references the changes and what they mean for the narrative of the organization.


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