UBS Konfekt
INVESTING IN WOMEN
FOSTERING ECONOMIC EQUALITY
A new era of economic engagement is unfolding, led by a generation of women with diverse experiences and expertise. Together they are building a legacy of equality and shared prosperity that will benefit everyone.
CLAUDIA GOLDIN
BREAKING BARRIERS IN ECONOMICS
THE HIDDEN DIVIDE
The Nobel prize-winning economist’s ground-breaking research into female labour participation sheds light on inequality and offers solutions for a more equitable future.
In its 55-year history, the Nobel Prize for Economic Sciences has only ever been awarded to three women. The first was political economist Elinor Ostrom, who won a joint award with her male colleagues in 2009; French-American economist Esther Duflo repeated that achievement a decade later. But in 2023, US labour economist Claudia Goldin made history by becoming the first woman to win the prize solo, largely for her research into female participation in the economy. “Understanding the role of women in labour is important for society,” says Jakob Svensson, chair of the Committee for the Prize in Economic Sciences. “Thanks to Claudia Goldin’s ground-breaking research we now know much more about the underlying factors and which barriers may need to be addressed in the future.”
Goldin is renowned for her deep expertise and fearless, probing econometric approach to academic research. “I will be doing the empirical work, as correctly as I can, and then you have to craft it,” she says. “It’s a bit like preparing food. You have to serve it to someone and they have to want to eat it.”
Born in 1946, Goldin rose rapidly through the academic world. Honing her skills at Cornell University before completing a master’s at the University of Chicago, she later became the first woman to receive tenure in Harvard’s economics department. Over the years she has analysed the impact that education, technology and societal norms have had on labour with a focus on the inclusion (and exclusion) of women in the workforce. Published in 1990, her landmark book Understanding the Gender Gap: An Economic History of American Women laid the foundations for a radical rethink of the way that women’s employment is viewed in the US. It used quantitative research to explore why and how female contributions to the world of work had been undervalued and misreported. Goldin looked behind the census and brought in biography to paint a clearer picture of female labour history. “I was depicted by the Nobel committee as a historical detective,” she says. “That really is the way I approach my work.”
While Goldin’s writing mainly deals with historical issues, it has often been used by contemporary policy-makers tasked with improving equality in the workplace. Women hold almost 35 per cent of the world’s wealth. Around half of all women are in paid employment, compared with 80 per cent of men. Goldin’s rigorous approach has challenged perceptions and unravelled complex social, cultural and economic dynamics surrounding issues such as the gender pay gap. Crucially, Goldin’s research is credited with taking the study of women’s participation from a niche subcategory to a place of macroeconomic importance for all.
Much of Goldin’s research is a deep dive into history of the labour force, yet her approach also takes aim at contemporary work dynamics. She recently examined the extent to which educated women from different generations have been able to combine a family with a career or job. “Work is often very greedy,” says Goldin. “The more hours you put in, the degree to which you give up your time on vacation or weekends, the degree to which you’re on call in the office, the more you earn. Both members of a different-sex couple could take that greedy job and they’ll be doing really well. But if there are care responsibilities that require, as they do, one parent to be on call at home, then one person has to take a [more flexible] position.”
This dilemma is what Goldin thinks is driving inequity. “Going back to this couple, they can’t both take the greedy job,” she says. “In general, the different-sex couple is enticed to have one of the members of the couple take the greedy job. That then means they give up couple equity because it’s generally the woman who takes the flexible job. They throw gender equality under the bus.”
In a world where work-life patterns are in flux, Goldin’s insights are crucial for moulding a fairer, more inclusive workplace, as well as constructing a tangible heritage for future generations. “Knowing what the problem is may not tell us what the solution is,” says Goldin, though she pinpoints the opportunity that greater flexibility offers women but also the need for social care structures to support women who find themselves eschewing “greedy” well-paid jobs so that they can balance childcare.
In the meantime, Goldin is dedicated to making sure that more women hone their expertise in the academic study of macroeconomics and econometrics; lucrative fields which tend to attract more male students. “One of the reasons that women have not gone into economics in graduate programmes is that they often didn’t major in economics and they didn’t do that because they thought economics was about finance,” says Goldin. “I often hear from young women, ‘Oh, I don’t want to go into economics because it doesn’t concern people.’ But economics certainly does concern people. It teaches you a tremendous amount about the way that the world works.”
WOMEN DRIVING GROWTH
THE OPPORTUNITY OF EQUALITY
Marianna Mamou, head of Advice Beyond Investing, UBS CIO
Christine Lagarde, president, European Central Bank
Honing equality, forging growth
Bridging the gender wealth gap isn’t just an issue of conscience. As Claudia Goldin’s work demonstrates, economic success sows the seeds of equality. Once in place, that hard-won equity also creates opportunity and propels growth on a corporate and national level. The subject of female inclusion is no longer a sub-category but part of a wider conversation. The International Monetary Fund (IMF) has stressed the “macro-criticality” of increasing equality in the economy calling it “an economic imperative”. “Over time, gender-sensitive macroeconomic and financial policies will result in higher growth, greater economic stability and resilience, and lower income inequality – a dividend not just for women, but for everyone,” wrote the IMF’s managing director, Kristalina Georgieva, in a joint letter with her colleagues Antoinette M Sayeh and Ratna Sahay.
These goals might seem elusive but the potential economic returns are vast. In 2022, UBS’s Women and Investing report found that if women invested at the same rate as men it could create more than $3trn (€2.7trn) of additional global capital for investment. Female Founders First, a UK-based community dedicated to empowering female entrepreneurs, estimated that there would be an additional £250bn (€298bn) added to the UK economy if women-founded and women-led businesses had equal access to investment.
There is data to suggest that women invest the fruits of their success back into society differently from their male counterparts. This is what Ngozi Okonjo-Iweala, director general of the World Trade Organization, calls “smart economics”. “Studies have undoubtedly shown that empowering women is smart,” she said on The European Central Bank (ECB) Podcast in 2023. “Women plough so many of their resources back into their family and their community, educating their children better and faster. It’s smart for the family, the community and the country.”
Weaving networks of expertise
Setting women on a path to financial equality means narrowing the funding gap, a chasm that looms large when it comes to investment. In 2023, companies founded solely by women received just 2 per cent of the total capital invested in venture-backed start-ups in the US and Europe. For economists, changing this narrative is crucial. “We need women to take their rightful place in the jobs and applications that will define the future,” said ECB president Christine Lagarde on International Women’s Day earlier this year. “We know that we need more entrepreneurs in Europe because it is the key to job creation, competitiveness and prosperity, but we are not getting the most out of female talent to reach these goals. The share of female start-ups stands at 23 per cent in the US and 11 per cent in the EU. One reason is that female entrepreneurs find it significantly harder to attract capital. Confidence is a key ingredient that is often missing.”
For Marianna Mamou, head of Advice Beyond Investing, Chief Investment Office at UBS, changing the narrative requires threading together a web of confidence and contacts. “Research shows that having a strong network plays a critical role in deal sourcing and investors’ decision-making – men are much more likely to have such a strong network,” she says. “It is important that we raise awareness and showcase more female role models. We need to change the perception of what a successful founder looks or sounds like. Education around the financing process can help reduce biases.”
UBS is crafting that change through schemes such as the UBS Female Founder Award, which offers early-stage female founders with a year-long, global investor readiness and networking programme. “All of us would benefit by eliminating this funding gap,” says Mamou, who adds that female founders are more likely to create new jobs, help local economies and reinvest their earnings into the health and education of their families. “Besides the obvious moral imperative, this is a great business opportunity. Boston Consulting Group found that, on average, women generate 78 cents of revenue per dollar invested, compared with 31 cents for men,” says Mamou. “If women and men were to participate equally as entrepreneurs, global GDP could rise by 3 to 6 per cent, boosting the world’s economy by up to $5trn (€4.56trn).”
Ngozi Okonjo-Iweala, director general, World Trade Organization
Kristalina Georgieva, managing director, International Monetary Fund
Crafting a stronger future
Labour participation and long-term financial strategy are key strands in the quest to create a durable legacy. A recent report published by the UBS Chief Investment Office, Women and Investing: Achieving Lifetime Goals, sheds light on the wealth-accumulation challenges that women face and the impact that these have on future objectives – retirement, in particular. The report cited data from the Organisation for Economic Co-operation and Development (OECD), which showed that women over the age of 65 on average receive 26 per cent less income than men from the pension system in OECD countries.
Creating financial equality is about taking the long view, allowing women to build and manage their legacy and prospects on a par with men. Emma Wheeler, head of Women’s Wealth, UBS Global Wealth Management, outlines the complexity of challenges facing her female clients. “Some say the gender gap can start as early as the pocket-money stage,” she says. “Women have to contend with a pay gap, career breaks, maternity, and the propensity to work part-time. It’s not about fixing women. It’s about fixing the industry.”
In Wheeler’s eyes, understanding financial health is as fundamental as understanding physical health. “The more engaged a woman is in her long-term financial planning, the happier and more confident she is,” says Wheeler. “Research proves this and yet we see a lot of women hesitate before even talking to a financial advisor.”
Understanding the deep-seated issues at stake is a craft as well as a science. UBS draws on data insights and expertise but also an intuitive approach to building profound trust with clients. It pairs a long view and sense of the bigger picture with attention to the smallest details. “We have been driving behaviour change with our client advisors globally to have the right conversations with our female clients,” says Wheeler. “This is what will drive growth for us: 45 per cent of our clients globally are women now, which has grown by 5 per cent in the past three years because of our approach. By 2025, 35 per cent of global private investible wealth will be in the hands of women. These facts, coupled with the Great Wealth Transfer, the demographic shift between Boomers and Gen Z, mean that women will control the lion’s share of private wealth over the next 20 to 25 years.”
Providing sound, intuitive and considered advice is crucial to growing any portfolio. And Wheeler is committed to making those opportunities accessible to all. “Ensuring that we continue to best serve our female clients is a priority for us,” she says.
ANA MAHONY
EMPOWERING FINANCIAL FUTURES
DEMOCRATISING WEALTH ACCESS
Addition Wealth founder Ana Mahony wants to unlock personal financial expertise and provide access to market knowledge.
How did Addition Wealth get started?
I worked in consumer finance in both the public and private sectors, and then at Uber for six years. During that time I witnessed the power of using technology to make things accessible to people that were previously unaffordable. After these experiences, and recognising that the vast majority of individuals are still stressed about their finances without access to traditional support models, I wanted to build a company that brought product technology and skilled marketplace solutions together.
What are the biggest challenges to female engagement with financial wellness?
Traditional financial advisory companies cater to individuals who have about $1m (€910,000) of assets under management at a financial institution. It’s part of the reason that we built a welcoming model where there’s no minimum money required. We distribute through the employer channel, which we found to be a hugely impactful partnership because we can configure the platform to include information about how one is paid from their employer, such as your benefits package, your retirement plan, any potential equity compensation or emergency assistance programmes.
Could you tell us about working with the UBS Female Founder initiative?
It’s an honour to have been selected for the UBS Female Founder Award alongside so many accomplished finalists. As a start-up in the fintech space, it’s fantastic to partner with UBS and learn valuable insights for our business. I’m also very grateful that UBS is investing time and resources to support more female founders.
RANIA ANDERSON
ADVOCATING FOR ALL WOMEN
GLOBAL INSIGHTS, LOCAL EMPOWERMENT
Business leader Rania Anderson draws on her wealth of diverse experiences to show women new paths to success.
What is the most important lesson that you have learned in your work?
That what got you to this point won’t necessarily get you where you want to go next. Essentially, the strategies that work for us early in our careers are not the same ones that get us past mid- or senior management to the executive suite. You need different types of experiences in parts of the business that you’re in to make a difference. Don’t just stay in marketing or HR enablement functions.
How does your advice differ between established and emerging economies?
Western career advice doesn’t always apply. If you’re a woman in Saudi Arabia and you work for Aramco and you think you deserve a salary increase, you’re not going to walk into your boss’s office like you would in Europe. But hundreds of millions of women in these non-western markets have executive roles. What I like to do is to study how people are succeeding and how we can provide that information more broadly so that women know what they can do in their own countries.
What more can be done to encourage industry-wide changes?
It’s important to be an inclusive leader, to understand that the system isn’t really set up for everyone to succeed. And so how do you change the system? The way that you write job descriptions and performance reviews, the way you do assignments – all those things really matter and they will have a positive impact if they are done in a way that’s inclusive. That’s how we really can make a change.
UBS NOBEL PERSPECTIVES
WISDOM TO BRING ABOUT CHANGE
PRECIOUS CONVERSATIONS
Engage with Nobel laureates for transformative economic expertise and solutions to global challenges.
Who is better suited to provide thorough and well-thought-out economic advice than a Nobel laureate? The UBS Nobel Perspectives programme pools the expertise and well-honed knowledge of more than 50 Nobel laureates to provide precious insight and foster conversations on big socio-economic questions that can lead to life-changing ideas.
Through a mix of articles, videos and Monocle Radio’s The Bulletin podcast on the UBS Nobel Perspectives platform, these experts answer questions on topics varying from environmental economics to the solutions to tackle global poverty. Among them is US labour economist and 2023 laureate Claudia Goldin, her work has been critical to further understanding the complexities of gender disparities in the workplace and her participation in the UBS Nobel Perspectives programme offers key insight into the practical alterations that can be made to bring about systemic changes.
For those wishing to engage further with the laureates, the annual UBS Nobel Perspectives Live! conferences are hosted in various locations, from Frankfurt to Taipei. The events provide a chance for laureates to share their in-depth analysis and motivation on future challenges. Moderated by experts and journalists, they are also unique opportunities for business leaders, policy-makers and academics to take part in a dialogue with the most brilliant minds in their fields. With this programme, UBS knits together academic research and public understanding, allowing individuals to engage with world-class economists. In a world where trusted expert voices are more important than ever, UBS Nobel Perspectives creates a space for evidence-based, thought-leading insights to flourish.
