Promotion and career advancement at the central bank: a matter of gender?
To mark International Women’s Day on 8 March, we wanted to share with you an intriguing study published some months ago by the Banco de España and the European Central Bank (ECB) examining gender differences in the career progress and promotion of ECB economists.
The study examines career inequality between men and women in the male-dominated world of the central bank, drawing on confidential anonymised data for staff at the European Central Bank (ECB) between 2003 and 2017.
The research examines the under-representation of women in high-level positions of the economics profession, which is particularly visible at central banks. According to the literature, there are several explanations for this:
- Women remain less likely to study economics in general, and macroeconomics in particular.
- Women are less likely to apply for promotion. The presence of children and trade-offs between family and career can hold women back from pursuing promotion.
- There may be gender-based discrimination in promotion decisions.
The research also finds evidence for the following:
- A wage gap develops between men and women within a few years of hiring, despite similar entry conditions in terms of salary levels and other observables.
- Women were less likely to be promoted to a higher salary band prior to 2010. This gender promotion gap was partly driven by the effect of motherhood on women's careers.
- The promotion gap between men and women disappeared after the ECB introduced several measures to support gender equality in 2010. The 2012-17 data on promotion procedures indicate that women are just as likely to be promoted as men. However, the figures also reveal the following when it comes to promotion procedures:
- Women are less likely to apply for promotion, meaning there are fewer female than male applicants.
- Women are more likely to be selected from the candidates than men.
- Following promotion, women perform better in terms of salary progression than men.
The study finds that institutional policies on diversity and equality are effective at curbing gender bias in promotion and career advancement.
Nonetheless, it asserts that these policies should include measures aimed at lowering the barriers faced by women when seeking and applying for promotion opportunities. Such measures could range from mentoring programmes to enhanced child support benefits and services.
To quote our Deputy Governor, “It is not simply a question of what is just and fair; it is also in our collective interest. We can ill afford to ignore the talents of half the population”.