Women desert Wall Street

By Felix Salmon
September 20, 2010

Chart of the day comes from Kyle Stock:

women.gif

This is very bad indeed: women are leaving the financial-services industry even as men are joining it; and the trend is most pronounced among the youngest cohorts of the population, who will be running the industry in the future.

The losses are steepest for the youngest women, including those just out of college. The number of women entering finance-industry jobs at age 20 to 24 fell 21.8% over the past decade. For jobs across all industries, the overall number of women in the work force was unchanged over the same period.

This is not — or not only — a crisis phenomenon: the number of women on Wall Street was falling even from 2001 to 2006.

So what’s going on? Stock wheels out a couple of theories:

Across the economy, computers have replaced junior, back-office workers, jobs that were largely filled by women…

Given recent volatile markets and much scrutiny on compensation, there are fewer incentives to stay in the business for those women who have already chosen finance-industry careers, said Grace Tsiang, an economics professor at the University of Chicago.

Ms. Tsiang theorized that these women are having and raising children rather than staying on the job.

“Women have this higher alternative value of how to spend their time,” Ms. Tsiang said. “They’re always perched on this edge, and if the value of staying in a high-pressure job goes down just a bit, then that might make a big difference in the number that jump.”

I don’t find either of these theories particularly convincing. For one thing, have Wall Street back offices really thinned out since 2000? And were they particularly female-dominated back then?

And as for the idea that women would rather quit to have babies rather than cope with volatility, frankly it’s downright offensive. And doesn’t square with those job losses between 2001 and 2006, when volatility was declining and compensation was rising.

I’m also unimpressed at the part of Stock’s article which veers into anecdote. He manages to find two women who left Wall Street; one of them started a firm called ChickRx, and the other founded a company “which makes protective covers for high-heel shoes.”

The most depressing part of Stock’s story, however, is probably the reaction of the Wall Street boy’s club:

Wall Street isn’t keen to talk about these gender shifts. A number of firms, including J.P. Morgan Chase and Lazard Ltd., declined to answer questions for this article, and some of those that responded declined to detail the male-to-female ratios of their staffs.

Unless you’re open about your gender-balance problems, you’re never going to fix them. And we’ll end up further away than ever from a world where more than one in five executives in the financial-services industry is a woman.

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