Why Diversity and Inclusion (or the lack thereof) Matter for Economics

There is a growing awareness, supported by high-quality evidence, that economics has a 'diversity problem', but limited focus is trained upon why it matters and why addressing economics' diversity and inclusion issues should be a priority for all individuals invested in the health of the discipline. This post, first, briefly lays out the concerns facing economics, before addressing the consequences, followed by avenues for positive change.

Diversity and inclusion are two separate, but related, concepts. Diversity concerns the range of people in a population of interest, whereas Inclusion refers to how 'included' different people are and involves ideas such as mutual respect, and equal opportunities. Diversity and Inclusion depend on each other; diversity cannot be maintained if some groups feel excluded, and inclusion cannot exist without sufficient diversity to apply inclusive principles.

Reports concerning gender and/or ethnicity in academia, reports from industry, and academic studies all find shortcomings in both representation and opportunity for some groups in economics; in particular, women are under-represented in the discipline from top to bottom, while some ethnicities are either under-represented, particularly in more senior work positions, or less likely to reap the same rewards as white counterparts.

Building on this body of work, in March 2023 the Royal Economic Society published its first Diversity Report, with contributions from Aston, which explored the state of diversity amongst UK-domiciled students on UK undergraduate economics degrees—specifically focussing on socio-economic issues, and how these intersect with the previously studied gender and ethnicity.

Studying undergraduate students is important because of their role in the 'economics pipeline'—the term describing the journey taken by individuals in economics from first study (potentially as early as GCSE for some students) through to later career. The pipeline metaphor is useful because it allows us to think about who enters the pipeline—only people who enter can make it to the end—and we can think about leakages from economics like leakages from a pipeline—who leaves economics, where are the leaks? We can also link the metaphor to the titular ideas of Diversity and Inclusion; we need to encourage sufficient diversity into the pipeline, and we need to be sufficiently inclusive to stop particular groups from leaving/leaking.

One thing is clear from all the results: there are definite issues in who enters the pipeline, and there are definite issues around who leaks from the pipeline:

Women are dramatically underrepresented at every stage of the pipeline; they are less likely than men to study economics before university (less likely to enter the pipeline), they are less likely to study economics at university even if they have an economics a-level (leakage), and they are less likely to reach the higher echelons of economics-based professions (leakage).

Similarly, there are some ethnic groups who are far less likely to study economics at university relative to others (particularly black compared to white students), even if we control for other covariates (so, comparing on a like-for-like basis). These students are generally more likely to drop out of university (leakages), and also less likely to achieve the same professional success as their white counterparts.

In our report we also demonstrated that economics is an elitist subject which dramatically favours students from richer backgrounds relative to less economically advantaged. Students from low-HE-participation areas, or from households of lower socio-economic classification, are far less likely to study university economics, more likely to drop out, and (again) less likely to achieve professionally. On the other hand, students from fee-paying schools are dramatically over-represented in economics, relative to all other disciplines. Moreover, being from a less-advantaged background magnifies many of the gender/ethnicity effects we identified earlier—though there is evidence that less advantaged students who study economics a-levels are just as likely as richer students to continue in the discipline, but only 50% of state schools offer economics a-level.

One thing is clear from all the results: there are definite issues in who enters the pipeline, and there are definite issues around who leaks from the pipeline:

Women are dramatically underrepresented at every stage of the pipeline; they are less likely than men to study economics before university (less likely to enter the pipeline), they are less likely to study economics at university even if they have an economics a-level (leakage), and they are less likely to reach the higher echelons of economics-based professions (leakage).

Similarly, there are some ethnic groups who are far less likely to study economics at university relative to others (particularly black compared to white students), even if we control for other covariates (so, comparing on a like-for-like basis). These students are generally more likely to drop out of university (leakages), and also less likely to achieve the same professional success as their white counterparts.

In our report we also demonstrated that economics is an elitist subject which dramatically favours students from richer backgrounds relative to less economically advantaged. Students from low-HE-participation areas, or from households of lower socio-economic classification, are far less likely to study university economics, more likely to drop out, and (again) less likely to achieve professionally. On the other hand, students from fee-paying schools are dramatically over-represented in economics, relative to all other disciplines. Moreover, being from a less-advantaged background magnifies many of the gender/ethnicity effects we identified earlier—though there is evidence that less advantaged students who study economics a-levels are just as likely as richer students to continue in the discipline, but only 50% of state schools offer economics a-level.

Beyond our study, but still focussing on academia, research from the US has shown that economics is the most elitist PhD programme with the fewest students from university first-generation households, the fewest US immigrant students, and the highest proportion of students who previously attended 'Ivy Plus' institutions (note also, these patterns very much match what we observe in the UK undergraduate population). These are the people who will become lecturers and educators, thus perpetuating diversity issues in academia.

Meanwhile, in the professional sphere, both the Government economic Service (GES) and the Financial Conduct Authority (FCA) have made diversity a key strategic priority. While the former has not published data, the FCA, as a sector regulator, has acknowledged, the importance of diversity and inclusion. Unfortunately, the FCA also highlights the shortage of women and ethnic minority groups in senior roles in companies; where (as of 2021) only around 13% of FTSE350 CEOs were women, with smaller proportions from ethnic minority or lower socioeconomic backgrounds.

Despite all this evidence around diversity and inclusion, it is difficult to establish the precise impact that this lack of diversity is having on research, education, and the economics profession more generally, (though the growing interest in diversity issues is shedding light on the possibilities):

As a simple imperative, any evidence of a lack of diversity or inclusion may be an issue—any systemic barrier which prevents some groups from studying economics, or working in some jobs, based on characteristics out of an individual's control, is, at a moral level, unacceptable. All individuals should have access to the same opportunities, irrespective of gender, ethnicity, or socio-economic background.

 At a more practical level, it is essential to understand that diversity is important because people of different backgrounds and characteristics are likely to have had different life experiences, leading to different world views, priorities, and decision-making, especially at an unconscious level. To understand how lack of diversity negatively affects the wider economic profession, it is constructive to draw on the concept of 'groupthink'—where a lack of diversity, inclusion, or pressure to conform to a dominant way of thinking leads to groups of individuals to adopt common (sometimes unconscious, usually suboptimal) behaviours and attitudes. Groupthink leads to 'group thinking', diminished critical thought about group behaviour, and resistance to outsider ideas. In particular, the 'groupthink' concept, stemming from limited diversity, was used to after the financial crisis in trying to explain why investment risks were underestimated by so many. 

'Groupthink' also affects which research which gets carried out and disseminated:

From the outset, the conception of a 'worthy' research question is subjective and will be influenced by the individual experience of the researcher (our own experiences will unconsciously dictate what we choose to research), and by trends in publishing which are often determined by high-ranking journals—themselves influenced by the makeup of their editorial board. We need to ask ourselves, how are these trends in publishing emerging, who is deciding, and is there sufficient room in this process for outside voices which may not conform to a dominant way of thinking.

At an execution stage, we need to consider the notion that the dominant methods and the dominant paradigm in economic thought have themselves been elevated to their position by the dominant voices in economics. The distinction between orthodoxy versus heterodoxy was not determined by nature, it was determined by individuals—do these distinctions serve or exclude some groups more than others? Does the rigid orthodoxy-heterodoxy distinction serve to preserve a particular dominant way of thinking.

Finally, the methods by which research is disseminated are also affected by the dominance of one group over others; we have already raised the idea that journal editorial policy is going to impact upon what type of research which is favoured. We also have evidence to suggest that beyond thematic preferences, we find that female authors are held to higher standards, take longer under review, and that women may feel pressured into improving (already superior) writing styles more than their male counterparts. Other types of dissemination are not immune either; ill-considered organisational choices can exclude some groups from conferences and workshops. What impact is this having on research from disadvantaged groups, and would these sorts of decisions be made if organising committees were both diverse and inclusive?  

The reality is that economics will not become diverse nor inclusive without cultural and behavioural change to ensure all students are attracted to the subject and they feel respected, heard, and included. This change starts with us, as individuals, and, although change is difficult, there are already numerous organisations (including Discover Economics, Re-Thinking Economics, and many others) who are striving to make positive change and able to support us in our own endeavours.