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Is a Lack of Confidence Killing Women’s Careers?

April 23, 2014
Personal Finance
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Women have made great strides in the workforce in recent generations: More women now graduate from college than men, and since 2009 there are as many women in the workforce as men. As I wrote five years ago for CNN, the greatest growing economic force in the world isn’t China or India, it’s women.

Yet in the upper echelons of the business world, women have made few statistical strides in recent years. According to the research outfit Catalyst, women’s 16.6% share of corporate board seats hasn’t grown since 2004. The percentage of female executives at Fortune 500 companies is even smaller, and remained flat at 14.3% from 2009 to 2012.

By one important yardstick of success—perhaps the most important—women have yet to earn their full measure: Across all professions and management levels, females still make less than their male counterparts. Women earn an average of 77 cents for every dollar earned by a man, according to analysis by the Center for American Progress. And as NerdWallet Health revealed in a study this week, female doctors are pulling in only about half as much money as their male counterparts in the Medicare system.

The Atlantic magazine takes aim at all this with a cover story by Claire Shipman, a reporter for ABC News, and Katty Kay, an anchor at BBC America, arguing that women face a glaring “confidence gap” when competing with men.

“Compared with men, women don’t consider themselves as ready for promotions, they predict they’ll do worse on tests, and they generally underestimate their abilities. This disparity stems from factors ranging from upbringing to biology,” they write. “Success, it turns out, correlates just as closely with confidence as it does with competence.”

They back their claims with a raft of research borrowed from behavioral finance: Women ask for 30% less money than men do; men initiate salary discussions four times more than women do; women rate themselves negatively compared to men on scientific ability, yet score almost the same as men do.

Why? Nature, nurture and society all are to blame, they say.

Biology plays a part

Women’s amygdalae, sometimes described as the brain’s primitive fear center, activates more easily, meaning “women are more apt to ruminate over what’s gone wrong in the past.” This impedes risk-taking. The anterior cingulate cortex, the “worrywart center of the brain” that helps us recognize errors and weigh options, is also larger in women.

High testosterone levels also correlate to an appetite for risk-taking in men. Males also chronically overestimate their abilities in study after study, while women underestimate their skills.

Women reared to be ‘perfectionists’

Girls start school with “longer attention spans, more-advanced verbal and fine-motor skills, and greater social adeptness. They generally don’t charge through the halls like wild animals, or get into fights during recess.” That behavior is rewarded and, a result, a streak of perfectionism runs higher in women. “Perfectionism is another confidence killer,” they write. “We watch our male colleagues take risks, while we hold back until we’re sure we are perfectly ready and perfectly qualified.”

Boys, meanwhile, are constantly upbraided for unruly behavior, which helps desensitize them to criticism later in life. There is also a high correlation between participation in school sports—which nurture persistence and resiliency in defeat—and success in business. Yet girls are six times more likely to drop out of sports in school, the authors note.

Confidence and the B-word

The most troubling finding is that when women display more confidence and assertiveness in the workplace, their coworkers—both men and women—view it in a negative light. “If a woman walks into her boss’s office with unsolicited opinions, speaks up first at meetings, or gives business advice above her pay grade, she risks being disliked or even—let’s be blunt—being labeled a bitch,” they write.

“So confident women can find themselves in a catch-22,” they say. “Biology, upbringing, society: all seemed to be conspiring against women’s confidence.”

The authors argue that confidence—“the stuff that turns thoughts into action,” as one researcher called it—can be learned. “It is the factor that turns thoughts into judgments about what we are capable of, and that then transforms those judgments into action.”

One important question goes unanswered in the Atlantic article. As the authors note, investments run by female hedge-fund managers outperform those run by male managers. There’s also a slew of data that companies with more women on executive boards and senior management teams are more profitable than firms with more men at the top.

On the personal finance level, studies consistently show that women are better at managing family money. Nobel Laureate Muhammad Yunus, the father of microfinance, built the system of giving small loans to the poor almost exclusively through women. “We noticed that women were better borrowers,” Yunus told me in a 2007 Wall Street Journal interview. “Women took better care of the finances; the children benefited more.”

Doesn’t this suggest the opposite of the Atlantic’s thesis? That instead of more women who mimic the testosterone-soaked assurance of men, the business world could profit from a more female worldview: not so overconfident, more circumspect with a higher degree of humility?

As Elizabeth Plank puts it for PolicyMic: “Instead of telling women to change their personalities, maybe it’s time we take a look at the entire system.”

That would require a great deal of confidence.

Read more on NerdWallet:

Why Women Doctors Make Half of What Men Do: Medicare’s Doctor Gender Pay Gap

Why has tech been sidelined as women make headway toward gender equality?

 Places Where Women Make The Most Money

Top Ten Cities for Women Entrepreneurs

Are You Bad with Money? The Reason May Be in Your Genes

Illustration by Brian Yee.