STEM Parents and Women in Finance
- Renee Adams, Brad Barber and Terrance Odean
- Financial Analyst Journal, forthcoming
- A version of this paper can be found here
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What are the research questions?
- Do (female) role models influence the career choices of young men and women?
- If #1 is “Yes,” does having a STEM parent close the math gender gap?
What are the Academic Insights?
By surveying the CFA Institute membership, the authors find the following:
- YES- having a STEM parent or sibling raises the probability that a daughter becomes a CFA member more than that of a son. In particular, having a STEM father, a daughter is 29% more likely to become a CFA compared to a son, while having a STEM mother raises this probability to almost 48%.
- NO- at least in relation to the PISA data, the authors do not find strong evidence that having a STEM parent closes the math gender gap.
Why does it matter?
Despite not being able to identify the connecting mechanism, this study documents that early childhood experiences have a profound influence on the career outcomes of women. Perhaps, a solution may be to provide finance professionals as mentors for girls to encourage them in pursuing a career in finance ( for instance, there is promising evidence from engineering as documented by Dennehy and Dasgupta, 2017)
The Most Important Chart from the Paper:
We show parental careers differentially affect the future career choices of girls and boys using survey data from CFA Institute members. Among CFA Institute members, women are more likely to have a STEM parent (particularly a STEM mother) than men. Relative to the base rates at which girls and boys become CFA Institute members, STEM mothers increase the girls’ rate by 48% more than the boys’ rate; STEM fathers increase the girls’ rate 29% more than the boys’ rate. Our findings are consistent with the hypothesis that early role models, particularly female role models, influence women’s choice of finance careers.