Break the bias. That's the theme of this year's International Women's Day. Bias has many faces. Some biases are obvious, while others are harder to see, but they're still there and they play a huge role in stopping us achieving gender equality. You're listening to the ECB podcast, bringing you insights into the world of economics and central banking. My name is Katie Ranger. Today's conversation is between two women who have both been strong advocates for female empowerment throughout their careers. Christine Lagarde, our president here at the European Central Bank, and Minou Shafik, director of the London School of Economics and Political Science. After years of progress, we're at a fork in the road when it comes to gender equality. The pandemic has hit all of us hard over the past two years, and it's been particularly tough for women, and we're now seeing a different kind of crisis. With Russia invading Ukraine, inequalities are likely to get worse, as women tend to suffer disproportionately during and after war. During the next half hour, you'll hear our two speakers talk frankly about gender biases in different aspects of our lives and what we need to do to break them. This episode was recorded on the 23rd of February 2022, before the war started. So to be told, I would like to tell all our members in the audience that Minou and I have been working together for quite a while. We have known each other for a long time, and I'm very, very happy that we are friends. So if you perceive anything that is a little bit hinted or insinuated, it's not a surprise because, yes, we know each other quite well. But we are more concerned about all of you, and we'd like, from our respective perspective, we'd like to touch on the topic of the day which is breaking the bias. And we've agreed with Minou that we would touch on education, home, workplace and leadership. And we'll get started with education, which of course, Minou and her capacity as the top boss at the London School of Economics is far more competent than I am. But what I keep thinking about the bias in education is the complete discrepancy or gap or inconsistency between the fact that more girls and women get an education, go to university, have diplomas, succeed and for some of them really strive. And the fact that when it comes to working and getting a job and having a carrier and moving on, there are far few of them. And I'm just wondering whether you have an explanation for that, Minou, from where you are and seeing all these young talented men and women around. Why is that? Yeah, no, it's a great point. And I should start by confessing that Christine was my boss and really one of the best bosses I ever had and a great role model in so many, so many ways. But let me answer your question, which is, you know, I saw a really interesting piece of research the other day called The Lost Marie Curies. And it looked at scientists around the world and how the pattern by which they patented innovations. And what it showed is that women peak later because, and it's very obvious women don't patent very much in their 30s. Whereas that tends to be the most productive period for men. Why? Because they're raising children and that women catch up in their 40s and 50s. And so they're because they had to delay their academic and professional achievement later. And I think that the biggest difference in career outcomes for men and women is driven by the fact that women still have primary responsibility for caring for children and old people. And until we change that, we're not going to be able to tap into the talent of all of these women now, more of whom have gone to university than men. So in fact, the education slash workplace bias is actually driven also by the home bias that we'll talk about later. Now, there's one thing which I find also quite interesting in education fields. And that has to do with sciences. Remember, we've always encouraged girls to go into STEM and it's been pushed as much as possible with scholarships with incentives and so on and so forth. And yet, when you look at your economists, those who graduate, I suppose you still today have more men than women. And it must even more so be the case in macroeconomics and possibly in monetary affairs, which is where I try to do my job at the moment. Is that so? Absolutely. Economics has done very poorly relative to other disciplines. You know, we were just chatting the legal profession has done better, medicine has done better, engineering has done better at getting more women in the senior ranks. In economics, if you look at say PhD programs in economics around the world, we're stuck at 30% women and we can't seem to get above that number.  And I think there's some of it is about maths and little and girls not wanting to do maths, but that's not the whole story because the engineers do maths as well. And so do many of the other STEM subjects. And they've been better at getting women into it. And so I think, I think we have to make a serious effort in in economics and particularly as you say in macro and finance, the women there are tend to be more in fields like development economics and labor economics, but not in the fields we've been in, which is macro, monetary, financial. Yeah, you referred to the my legal background and the legal profession where I spend the first 20 years of my life and where more progress has been made. And as compared with what has happened in the fields of economics, particularly the ones who were talking about, and I'm just wondering if it is not caused by the fact that it's both math, but it's also conceptual more than practical. And when I look at the legal profession, the law, first of all, there is a lot less mathematics, of course, and any concepts are actually based and rooted on very practical cases or situations or relationships. And I'm just wondering whether that appeals more or less to one one gender or the other. And whether that could be an explanation, because I don't think that the legal profession in and of itself made a huge effort to encourage women to go into law to progress in the profession, whether in the private or public sector. I think it happened almost in spite of those who were holding the forts who were predominantly men 40 years ago. I think you're right. The good news is, is I think economics is changing as a field. When I studied economics, we just did maths and we did models and we solved models. And it was very obsessed with abstract theory. I think modern economics is changing, especially because we have so much more data now because of computers, because of big data and the ability to manipulate large, large data sets. So a lot more economics is about data and quite practical and answering very clear empirical questions. And maybe that's a hopeful trend and maybe that will be more appealing to women economists in the future. That's a good point actually. You know, there was a study very recently conducted about reference letters. You know, those letters that employers and patrons of all sorts write to endorse a candidacy or to endorse an application. And it's very interesting that the general attributes given to women for those reference letters have to do with hardworking focused. It has to do with the way in which they deliver, but not so much what they deliver. So it generally doesn't refer very much to their ability, to their skill set. But you know, they are hardworking or they are focused or they deliver to which yet again is a very good example of yet another bias. And I think there was a study done on the language that was used or the questions that were asked to women who had an economic background and were again, it was the same sort of bias questions or bias and vaguely contemptuous language. So interesting. So interesting. We've been doing an experiment here at LSE about when we recruit not for academics, but for professional and administrative staff where we take out all the gender indicators on the job application. So you can't tell what the person's name is, what their gender is, what their religion is, nothing. All you can see are their qualifications. And we were trying to see whether that would actually mean we would recruit more diverse staff. What we found is that we did in fact shortlist more diverse people, but they weren't necessarily selected. So now we've introduced something else, which is every panel to recruit people has a fair recruitment advisor who's been trained to make sure that the way the questions are asked and how the candidate assessed is fair. And I hope that that will actually mean that we'll be getting more diversity coming through. But we've just got to try things and learn. So you now have a bias detector. Exactly. We have 30 staff who volunteer to be trained and will provide that service to the rest of the organization. And the strict anonymity is guaranteed all the way throughout the process, including until the last interviews. Until the interviews, yeah. That will be very interesting actually because there have been studies on the size, on the height, on the voice, on the tone, on the speed of delivery and all that goes in the direction of the adverse bias against women in most cases. And I think also many organizations now use recruitment online. There's a bit of a danger that the nature of those online processes are discriminatory, depending on how they're designed. So we have to be really careful about that. Do you remember the story about the Berlin Philharmonic Orchestra? Oh, yes. Go tell it. It goes way back. But in those days, it was men only. And the Berlin Philharmonic Orchestra is of course one of the top, top, top best formation in the world. But there was a move in order to introduce more diversity and hopefully bring about a few women in the group. Great resistance on the ground that of course women were not as talented and could not possibly perform as well to deliver the Rachmaninoff concerto number two or something, you know, sort of really strong. And they decided there was somebody enlightened at the time who decided to do the audition with a curtain, actually hiding the identity of the person who was playing the violin or the cello or whatever. And surprise, surprise, of course, women were eventually selected to play as beautifully or as strongly or as powerfully and with as good a sound as men. And it's from there on, the Berlin Philharmonic Orchestra started having women and it still sounds as beautiful as ever. So you're doing a bit of the same thing. We're creating a metaphorical curtain behind which people have to apply for jobs. Exactly. Now there's one thing that we have been doing at the at the ECB. It's been a scholarship. We have five scholarships, 10,000 euros each, in order to support five female economists to actually finish their study and make sure that they obtain their master's degree. And we provide the money, we provide the mentoring, we provide a study visit so that they feel part of the organization as well.  Can you give me advice? Actually, at the LSE, we fund a PhD scholarships for students. And we've actually earmarked in certain fields like economics where women are very underrepresented earmarked scholarships specifically for women to try and increase the pipeline of women coming through. Okay, so we can keep that as sort of tips to improve the situation. Especially dedicated scholarship and this sort of, what did you call it, metaphorical curtain. I think that's a great idea. And the bias detector is also a great one. So for those listening to us who are looking for tips, those are great ones. Now let's try to move to the breaking the bias at home. And here I'd love to bring in something that we've just gone through all of us, which is the pandemic, because it seems that wherever in the world, the pandemic has actually worsened the situation. And when we look at Europe, which is where we are located, whenever there was homeschooling required because schools were closed in pretty much all cases, that's what I have seen, at least in my environment. It was the mothers who stayed at home or who decided to multitask to the extreme, helping the kids during the day and then working their own work shift during the night. And the same applied not just for kids, but also for elderly. When some parents or grandparents were in pain, it was often the mother or the woman who actually decided to take charge and to give up the job or to multitask to the extreme. So I'm really concerned about that. And as absence from work has been demonstrated as being a lag in the carrier or as delaying progress or as a cause for the wage gap between men and women, I'm concerned that what has happened in the last couple of years is going to just worsen the situation and make it even harder for women who have decided to take time off or who have decided to go part-time or to reduce their workload, that they're going to suffer the burden of that even more. And I wonder what we can do about it. Yeah, I hear you, it's a real risk. I remember when you were at the IMF, you asked the staff to do work on unpaid work and showed very clearly that women do two hours of more unpaid work every single day on average around the world. And that of course cuts into their time for work and their career, but also for the rest of their lives. And the pandemic really made that situation so much worse because many were doing homeschooling and so on. I think we do have to talk about what goes on in the home. It's, you know, the data is very clear. There are more women going to university than men. When they graduate, they are earning the same and they keep earning the same until the first child is born and then the wage gap starts to grow. And women never recover because they do part-time jobs or they take time off, they then have less experience, they don't get promoted as quickly. And so unless we deal with both the division of labor at home and share housework a little bit more fairly, but also have society support young families. I find it really interesting when you look at happiness research at what makes people happy around the world, there's one universal pattern, which is everybody is least happy in their 30s and 40s.  And the reason is because that's the age when you have caring responsibilities, right? Have young children or elderly parents and you're still trying to work. And so I sometimes think, you know, just like we have an educational system and a healthcare system, we need a care system and we need to support people in society who have elderly or young caring responsibilities. And some countries are great at that. France is pretty good with children with young families and hence women are still having children in France because they're supported by the rest of society. But most countries haven't done nearly enough. And therefore women are either withdrawing from the labor force or not having any children. And that's a point that you make very well in the in your fantastic book, the new social contract, you know, what we owe each other, which I highly recommend to anybody who has not read it yet. And I'm not getting any commission on the publicity that I'm just giving for my friend. But do you remember minutiae as well, another study that we conducted that actually I think it was with the World Bank and the IMF at the time. And it had to do with the legal framework in which countries operated and we're much to our surprise, we found out that only I forgot, I think it was eight or 10 countries. It has slightly improved. I think it's up to 10 now, where only 10 countries had completely equal setting and zero legal discrimination against women. Many of those countries, by the way, were in Europe. I think Canada was the exception outside of Europe. But in all these other countries, you know, probably about 170 of them, you have some reminiscence or some very strong discrimination against women sometimes embedded in the Constitution. And I remember the study that we did at the time demonstrated that actually, once those legal discrimination were removed from the Constitution or were removed from the from the primary law, things actually changed. And either women felt more empowered, non governmental organizations or civil society took action and helped, but it certainly changed and brought about more women in labor, more women in entrepreneurship, and it actually really changed and for the better, apparently. So I think starting with the legal situation is certainly not the end of it, but it's certainly something that should be kept in check. Absolutely. One more thing on the issue of home and the point that you were making, there is one or two countries, Finland is one, surprise, surprise, Nordic country, of course, which has actually instituted a paternity leave when a child is born or adopted. And it's not a sort of a joint parental leave. It's a paternity leave. And if the father does not take advantage of that, that leave is gone. It's wasted. It disappears. And apparently that has had a bit of an impact on the paternal time spent in the early months of a child, which, as we both know, is critically important. Absolutely. There's a lot of evidence that children who have engaged fathers do much, much better. And they have a lot to offer. It's interesting, though, because there's definitely a cultural dimension to this. So I know that Japan and Korea, which have the lowest birth rates in the world, I think Korea's at 0.9, they now, I think, will pay two years of pay paternity leave for men if they have children. And even though it's on the books, nobody takes it. And the reason is, apparently, because they all worry that they'll be seen as abnormal if they take paternity leave when all their peers, it's a sort of collective action problem where they can't bring themselves to take it, even though many of the younger men are more forward-thinking and open to the idea. So we have to also communicate and normalize the fact that both parents have a critical role in caring for children. Yeah. I had a very nice, very liberal, very open-minded, very egalitarian partner in our Toronto office. And he was trying so hard. And his wife was a very active and successful lawyer as well.  I don't. She does. So true. It's the mental work, really. It's the ultimate accountability. Yeah. So true. I'm afraid I do the same. I mean, I'm the one who always remembers those things. Well, my husband is very good and helps and does all sorts of things. But I have to remember. I guess, you know, for Japan, I think role models would be so, so important because it's, I mean, in some of our Asian friends, communities and countries doing what the boss does or being endorsed by, you know, a role model who is hierarchically higher than you and has authority over you means so much. If you had Japanese CEOs and ministers taking paternity leave, that would send a very powerful signal, wouldn't it? I have to tell you a story. I remember attending a meeting of the Business Association of Japan, all male CEOs walking into that room. Of course, I was a junior by decades as well. And I remember making the point that I felt a little bit isolated. And that was followed by, you know, 30 seconds of absolute silence and zero reaction.  And it was a moment of intense crisis when Dominique Strauss-Kahn had been arrested in Washington and I was sent as the newbie who'd only been at the IMF for a month to go and represent him and talk about the Greek debt program with Europe's finance ministers. And you were the only woman around that table. And I remember walking in absolutely terrified because I was about to be interrogated for three hours on the Greek program. And you did one thing, which was, I still remember to this day, which is you could see that I was a little bit nervous. And you had lots of paparazzi around and photographers sort of lining up on your desks. I did. I was being followed by all these journalists and paparazzi who were photographing. And so that made it even worse. But you just gave me a thumbs up across the table. And we had never met before. But you could see I was, I needed a bit of support and I was the only other woman around that table. And it always reminds me that when you have a chance to support someone who's in a tricky situation, it can have a huge impact.  And so I think that's a very good lesson for all of us is always be there for other people and support them and support other women. Yeah. Yeah. Yeah. Yeah. That's true. I remember that moment. My goodness. But you know, I was always influenced by women around me, although I was brought up with boys.  And I think that she herself paid the price at the time. And she was, she made that point quite clearly. And I also give lots of credit to the men who support women. I certainly, I'm sure you and your career as well had many, many who opened doors for you and gave you chances and took a bit of a risk.  But you know, when I look back at those men, and there were certainly some of those, generally, they had an intelligent woman by their side. Yes. A daughter or wife. Yes. Yes. Absolutely. Absolutely. I completely agree. Yeah. And an independent-minded one as well. Yeah. So let's move on from home to the workplace. And by workplace, I think we should touch on the employment situation, but also the entrepreneur status, access to financing and things of that nature. Because I think that there is so much untapped energy, resources, innovation, talent, patterns to be filed, that, you know, eventually die on the parking lot of a bank or a screen that says no, thank you, apply later. That we should touch on that. Absolutely. On the entrepreneurship, we've actually created, we've discovered that of course, female founders are very rare and venture capitalists are rarely female and never fund female entrepreneurs. So we've created an incubator that you'll appreciate this. We call it LSE, but L is spelled E-L-L-E. Ah, right. To promote female founders and female entrepreneurship and for them to support each other. And as a way to kind of close that gap, which is very, very large. I think the other thing that's really interesting is that we're at a moment when we're rethinking work, partly because of the pandemic. And we can either rethink work in a way that is bad for women or that is good for women. The flexibility is great for women. But if women end up being the ones who work from home and the men are the ones who go to the office, there's a real risk that they get left behind. You are so right. It must be telepathy between us because I was going to actually take you in that direction. But before we get that, I love you LSE because it can be also L-O-C. Yeah. I'm going to use that. That's a great poem. So on this teleworking business, you are so, so right. And we are actually discussing that at the European Central Bank and we are concerned about it. And we fear that it will end up exactly as you described it. Female workers will telework. Male workers will congregate at the office. We are thinking of saying teleworking is good for all. We want to create a culture of work at work and everybody will have to come to the office a number of days. But we really want all of you to take advantage of teleworking so that it doesn't turn out into female work from home, male work from the office because that would be a disaster. You take the stigma away. It's funny. We did something similar here around tenure.  It's a big deal. You have to present all your work. You're reviewed. It's very rigorous. We knew because of COVID and that women had disproportionate caring responsibilities that many women would suffer when they came up for tenure. So there's a fixed amount of time you're supposed to have to come up for tenure. So we just extended it by a year for everyone. For men and women. Or for everyone. For everyone. We're going to let everyone have an extra year. And so it doesn't look like, oh, the women took longer. And so it's important to think about those potential biases when you're thinking about these kind of policies in the workplace. Yeah, because the part-time pattern is so much associated with women at work. And from that derive quite a lot of discrimination, slowed career development, less professional development and training opportunities and so on and so forth. So we can't afford to have that as well with teleworking. So we need to be really focused on yet again, this unconscious bias or this bias or this stigma that would result from it. Yeah. I mean, I think the other thing is the fertility clock for women matches exactly the years in your career when you're supposed to be building yourself up. And positioning for the longer term. And for most people, those years of fertility are also the years in work when you're not the boss. When you're older, you can control your schedule a bit more. You can, you know, you're more senior, etc. And that's a big problem. Obviously, the years of fertility have increased. So that's given a little bit more flexibility for women. But I think more important than that, we just, we need to have better, better support on child care. I think that that is the nub of the issue. You know, one of the problems with flexible working, for example, is that many people don't get benefits associated with that work. They get no maternity or paternity leave.  They don't get pensions. And I think one of the big risks is that as we move toward more flexibility, we have people carry more of these risks themselves. And I think what we need to do is move to a world where you have flexibility. But even if people are working reduced hours, they get benefits. You know, you remember when pensions became portable, you recognized that people will move from one job to another and they should be able to take their pension with them. Just like you have a pension pot, I think you should have a benefit pot. And that benefit pot, if you work for three employers in one week, each one of them has to pay a little bit for your parental leave and for your pension and sick leave and so on. I think that would be a much more modern social contract that would help. So the sort of contract and the benefits that go with it would be associated with the person and not with the job. Exactly. Actually, I think we're heading in that direction because when you look at the transformations that are about to happen in the workplace with a lot of old jobs going away and a lot of new jobs coming up. I mean, the automotive sector is the one that comes to mind right away. You actually want to support the people and not necessarily maintain the job or desperately try to keep the payroll going. You want the person to be supported, to be trained, to be re-skilled and all of that. So you're completely right and that applies to benefits and a sort of universal coverage. You know, you mentioned the founders and the LSE and the LsoC. I was really surprised to see that there was a German venture capital firm fund as well, of course, that is actually only going to finance and that is already financing only startup that have at least one of the founders of female because there's quite a lot of evidence, as you know, around listed companies that who have better female representation on boards do tend to perform better in terms of the stock market and asset valuations and so on. So it's interesting that it's now being extended to venture financing of entrepreneurship and startups. Interesting. It would be very interesting to see what their returns look like. Probably higher. I would venture that actually. You know what you just said about the fact that companies that have either one or several women on their board or even better on the executive team. A group of our researchers at the ECB did a similar research and tried to compare companies in the same sector with male dominated board or more gender, better parity on the board and what impact it has had on the climate change footprint and how much reduction of CO2 has resulted from one company or the other, depending on what the board composition was. And guess what? Surprise, surprise, there were better results, better outcome, better savings, better measures being taken in order to fight climate change in those companies which had a better parity on their board. I think it's a first study, I think it remains to be demonstrated on a broader basis probably, but it's quite an interesting initial conclusion. I mean, it seems an obvious thing to say, but when you have a lot of different people around the table, you make better decisions. I mean, I remember when we were at the IMF together, we had every conceivable nationality around the table, people who were quite, came from very different backgrounds and you created an environment where they felt they could speak up and we had big debates about loss of issues, some of them very difficult, but you made better decisions and you don't have the risks of group think that play organizations that are very homogeneous, like Central Bank. Yeah, that's very true. That's another universe where we could do with many more women, but you know, I was also wondering on this climate change because that came as a bit of a surprise to me and how they could pin down the sort of add-on resulting from better parity on those boards. But I was wondering also whether it doesn't have something to do with the fact that we are not bad at identifying risks and while not being risk adverse, but being in a way better risk managers, I mean, there have been studies on that in portfolio management in particular and given that climate change has now gone really high on the radar screen of risk that need to be mitigated, avoided and so on and so forth. Maybe that's also a cause for women to be taking more responsibility, to be more alert to those risks, could be, I don't know. I mean, the flip side of what you're saying is testosterone. I remember seeing some interesting research about monitoring testosterone on trading floors and the more the testosterone there was, the more risk they all took. And sometimes I can go terribly wrong. I think there was an FT study actually on that and then there was a very, very solid psychologist who conducted a long term study on this. That's very true. I remember someone I know who was on the board of a major bank who said, she said, what they need is more middle-aged women in those trading rooms to calm things down. And I know we should have touched on the women in leadership. We should actually. It's a bit difficult to talk about ourselves. But maybe, you know what, maybe we should look at it from a perspective of what advice can we give to younger women who are aspiring to be leaders, who want to have authority, responsibility and so on and so forth. Maybe if you reflect on how, you know, what has worked? What obstacles did we have to jump over and what was the best way about it? What would you say? I think sometimes I refer to the Holy Trinity and the Holy Trinity is a good partner, good childcare and a good boss. And if all three of those are good, it's possible to kind of have, you know, have a good life, a successful career and a happy family. But if any one of those is not present, it's really hard.  And if you don't have adequate childcare and you're always juggling and stressed and worried about that. And so in the moments of my life, when I've had those three things have gone really well. But when any of them broke down, it was really hard work. I don't know. What about you? So it's a good partner, a good childcare system and a good boss, a friend of mine, I have to tell you, Zia Moody. She's one of the most successful female lawyers of the whole of India, built her a law firm to, I don't know, 200 lawyers, very, very successfully. And she would agree with you. But she would add, and if the partner is not exactly up to up to the game, make sure that the mother-in-law is. And that will save the day. I can get on well with my mother if all that helps. But it does. It's very true. And actually, it's a good tip to have because mothers, I think, have a special responsibility when they raise children, when they bring up boys. One of my prides is to have taught my boys not just how to put a wash on, but how to iron a shirt beautifully.  But then comes the difficult part, which is the ironing bit. And I think, you know, if mothers and mother-in-law could actually support their daughters and their daughter-in-laws in that way. But I would say a good solid sense of humor is of great help as well. And by sense of humor, I mean, it's both a combination of humor and humility. The humility to accept that rising to the top, being a leader, it's all good, it matters, and you work hard for it, and you want to succeed. But in the grand scheme of things, there are also lots of other things that matter enormously and that have to keep us a bit humble in the face of occasional or sometimes frequent adversity. And I think it gives a strength to have that combination of humility for yourself and humor for the others. I agree.   I think we should stop now, Minoo, should you think? I think we've covered a lot of ground. I think we did. So it's time to break the bias. You've heard some ways each of us can contribute in our universities, in our homes, and in our workplaces. But we also have to think big and rebuild our economies and societies in a way that is more inclusive and, quite frankly, better. Check out the show notes for other podcasts and further reading on the topic. You've been listening to the ECB podcast with Katie Ranger. If you like what you've heard, please subscribe and leave us a review. We'd also love to hear from you, so do share your feedback and ideas with us via social media. Until next time, thanks for listening.


John, I have to ask you about something that I actually think the sports book has been wrong on all year long and that's still having the San Francisco Giants with a plus money price to win the National League West. They still have the best record in all of baseball and hold a four game lead in that division. Why do the Giants still have a plus money price to win the NL West right now on Fanduil? Because we think it's less than 50 percent chance of happening, I would argue. Look, I think we spoke about it a few weeks ago. I think the Giants have been obviously really excellent, but I think over the long piece and over the body of work for the full season, then we still think that they've got a less than 50 percent chance of winning the division and obviously they've got good teams to come up against. I said a couple of weeks ago after they swept the Dodgers, they put them in a far stronger position than previously, but yeah, I still think there's a decent chance they don't end up winning that division.