When Janet Yellen takes over the reins of the Federal Reserve on Monday, she will become one of the most powerful women in the world — a historic achievement that she has yet to fully embrace.
Her status has been trumpeted by others — she is featured in a Microsoft commercial “celebrating the heroic women of 2013” and heralded by glossy magazine Marie Claire as having “triumphed over the haters” — but Yellen has been reticent about the role that her sex has played in her four-decade career. She has even instructed staff members that her new title be simply “chair,” rather than “chairwoman.”
This is not the first time Yellen has broken through gender barriers in a field notorious for its sharp-elbowed machismo. She was the only woman in her PhD class at Yale University. In her early years as an academic and economist, she was dogged by skepticism of her abilities and overshadowed by her more extroverted and well-known husband, according to friends and longtime acquaintances. But the tables turned later in Yellen’s career as her family accommodated her growing star power.
Other women in similarly high-level positions have tackled the gender issue more directly. Christine Lagarde, theInternational Monetary Fund’s managing director, famously suggested that the financial crisis might have been less painful if more women had been in charge. Hillary Rodham Clinton made improving the lives of young girls a hallmark of her tenure at the State Department. Even German Chancellor Angela Merkel, who had made a point of avoiding gender debates, backed legislation to increase the number of women on the boards of the country’s publicly traded companies.
Yellen’s silence is a reminder that the workplace can still be treacherous terrain for many women. She didn’t speak out when President Obama mistakenly referred to her as “Mr. Yellen,” nor when a few snarked that she wore the same outfit to her confirmation hearing and nomination ceremony. Instead, Yellen — who declined to comment for this article — deployed the same strategy she has used for the past 40 years: letting her work speak for itself.
“A woman has to persist and prove more than once that she’s as good as anybody else,” said economist Meghnad Desai, who worked with Yellen in the 1970s. “I never thought that the world would finally recognize and reward her the way that it has. She has punched her way to the top by sheer ability.”
Two dozen economists earned doctorates from Yale University in 1971, according to the school. Yellen was the only woman.
The field of economics is known for pointed verbal sparring; those who stand out in classes are often the ones who argue the loudest. Many in the profession think that system helped create the dramatic gender imbalances that exist today. But the problem was so bad the year Yellen finished her PhD that the American Economics Association felt compelled to issue a declaration explicitly stating that “economics is not exclusively a man’s field.”
Although women were flooding onto college campuses — making up 40 percent of the student body, according to government data — they were still rare in the highest tiers of the ivory tower. At least three times as many men as women earned PhDs in any discipline.
Yellen finished her education just before the women’s movement erupted in classrooms across the country. Some of New York’s most rigorous high schools had been closed off to the Brooklyn native, including Stuyvesant, which did not begin admitting girls until 1969. Yellen graduated from high school in 1963 as valedictorian. She went on to Pembroke College, the women’s school at Brown University, which closed a few years after she left when Brown went coed.
Several of Yellen’s female contemporaries said outright hostility toward women was rare. Instead, they described feelings of isolation and small injustices that belied the nation’s ostensibly more progressive mind-set.
Francine Blau, an economics professor at Cornell University who received her doctorate from Harvard in 1975, recalled entering a classroom as a young professor only to hear a male student refer to the course as “sex ed.” Frances Van Loo, a professor emeritus at the University of California at Berkeley, said she had to trek up or down several flights of stairs to find a women’s restroom. Stanford University’s Myra Strober, an economist who earned her doctorate at MIT in the late 1960s, said she used to try on clothes at Filene’s department store just for a chance to talk to other women.
“The worst aspect is what you may be feeling inside,” Blau said. “You’re feeling like, well, you know, there aren’t very many of us, and maybe there’s a reason for that. Every time you hit a bump, you’re sort of, well, can I do it? Can I cut it?”
Yellen stood out within the intellectually competitive environment at Yale, and her lecture notes have become legendary. Her thesis adviser was the distinguished economist James Tobin. Her former professor and now close friend Joseph Stiglitz, a Nobel laureate, has called her one of his brightest and most memorable students. She landed a junior position in Harvard University’s economics department once she was done.
She was one of two women on the faculty.
The other was Rachel McCulloch, who was hired as an untenured professor from the University of Chicago. Although she had published a paper in one of economics’ most prestigious journals, McCulloch said she considered herself a token hire.
“I thought at the time, and I still think it was probably true, that the main reason I was hired was, well, we should have more women,” said McCulloch, now a professor emerita at Brandeis University.
The two women struck up a friendship in the cloistered and demanding confines of Harvard. Yellen wrote her first paper with McCulloch, on the relationship between migration and income inequality. But McCulloch said they rarely, if ever, discussed their status as the lone females in the department. Neither expected to be promoted from junior faculty to a tenured position at Harvard, which typically filled those coveted slots with established names from other universities. The department would not hire a tenured female professor until more than a decade after Yellen’s departure.
In retrospect, McCulloch wondered to what extent their relationship was born out of necessity. She co-authored five papers with Yellen through the early 1980s. McCulloch never published a paper with another woman.
Yellen’s most frequent and fruitful collaboration was with her husband, George Akerlof. It was through their joint research on the roots of unemployment that she established a national reputation as one of the foremost thinkers on labor-market dynamics. But in the early days of their relationship, she was often overshadowed by his flashier personality and longer résumé.
In academia, the role was nicknamed “the trailing spouse.”
Yellen and Akerlof both went to work at the Fed during lulls in their careers. She took a job in the central bank’s international division in 1977 after failing to win tenure at Harvard. He joined after he was passed over for a promotion at Berkeley — a setback that he has said triggered a deep depression that contributed to the demise of his first marriage.
Yellen’s and Akerlof’s paths crossed one day in the Fed cafeteria, and they soon discovered they were personal and professional soul mates.
“We liked each other immediately and decided to get married,” Akerlof wrote in a biographical note when he won the 2001 Nobel Memorial Prize in Economic Sciences. “Not only did our personalities mesh perfectly, but we have also always been in all but perfect agreement about macroeconomics.”
Akerlof had already written the paper that would win him the Nobel when he met Yellen. The Fed was a pit stop on his way to a professorship at the prestigious London School of Economics. The couple married quickly, and Yellen followed him in 1978 to England, assigned to the more junior role of lecturer at the college.
“I realized she was very undervalued,” said Desai, a professor emeritus at the university. “She was conscious that she was not being valued to the extent that she should have been.”
Two years later, Akerlof finally secured the promotion to full professorship in Berkeley’s economics department that had eluded him earlier. The university agreed to hire Yellen in its business school, which was considered at the time a second-tier placement.
Several faculty members recalled resentment at what was viewed as a favor to the economics department. There were just a handful of female professors at the business school then, and only one had earned tenure.
“Business was really a second-class place to be,” said Van Loo, who was on the faculty when Yellen arrived. “They did not want to have a sidekick be brought on.”
For Yellen, the challenge was compounded when she became pregnant within months of arriving at Berkeley — and before she was granted tenure.
Having a child greatly complicates the career track for many female academics. Several women sued Berkeley during the 1980s, claiming bias in tenure decisions. Even today, many female academics pay what Berkeley law professor Mary Ann Mason calls a “baby penalty.” Mothers are 35 percent less likely than fathers to be hired for a tenure-track job in economics or other fields of science at any university, according to her research.
“If you’re six months or nine months behind [the tenure clock], your male colleagues and the granting agencies don’t have a lot of sympathy,” Mason said.
Although Yellen arrived at Berkeley with an understanding that she would soon be reviewed for tenure on the strength of her previous research, according to Akerlof’s note, the university had no maternity leave policy at the time. And Yellen still had to prove that she could teach a wide swath of undergraduate students the basic principles of economics.
Robert Akerlof was born in the summer of 1981. The next semester, Yellen taught a class on applied international economics, according to university records. By the next spring, she was back to teaching two courses and published two more papers that year. Yellen earned tenure just after Robert’s first birthday.
“That’s kind of a stigma to have — you’re not being hired on your own merits. Women in general weren’t highly respected,” said Christine Rosen, an associate professor at Berkeley who was hired two years after Yellen. “What’s impressive is that she’s managed to overcome a lot of the prejudice that was out there.”
The report was titled “Explaining Trends in the Gender Wage Gap.” Yellen oversaw the study in 1998 while she was head of the White House’s Council of Economic Advisers in the Clinton administration. The analysis found that women earned 25 percent less than men — an improvement from the 40 percent gap two decades earlier.
“This evidence suggests that both women’s skills and job choices are becoming more similar to those of men, and also that discrimination may be declining as well,” Yellen said during a news conference on the report at the time. “We’ve come a long way toward greater equality in the pay received by men and women, but there is still too big a gap that remains.”
Her comments marked one of the few times that Yellen has spoken publicly about gender issues — and they could have been about her own increasingly progressive career.
Thirty years after women began flooding college campuses, they were finally reaching the highest echelons of government and corporate America, creating new networks of power in the process. In economics, Berkeley was one of the epicenters.
Laura D’Andrea Tyson was an international economist at Berkeley when President Bill Clinton tapped her to become the first woman to head the Council of Economic Advisers in 1993. She quickly became part of the president’s inner circle, and when he sought an academic heavyweight to fill a vacancy on the Fed’s board of governors, Tyson suggested that he consider Yellen, her colleague from Berkeley.
The appointment marked a turning point in Yellen’s career. Not only did it elevate her profile apart from her husband’s, but it also admitted her to the tightknit circle of women with the résumés to qualify for other high-level appointments. After three years at the Fed, Yellen replaced Tyson as the chief economist for the White House.
Throughout this time, Akerlof accommodated his wife’s career moves, adjusting his teaching schedule at Berkeley so he could spend several weeks in the nation’s capital each month. The travel eventually took its toll, and Akerlof took full-time leave from Berkeley to stay in Washington as a fellow at the Brookings Institution. Robert enrolled as a freshman at St. Albans School in the District, and the couple promised him that they would not move again until he finished high school.
In 2004, Yellen became the first woman to lead the Federal Reserve Bank of San Francisco. She returned to Washington in 2010 to again serve on the central bank’s board of governors, this time as vice chair. Her husband went along with each move.
“I can testify that the combination of access to remote computing via the Internet and professional concentration on analytical problems gives a person many more degrees of freedom to successfully meet competing demands,” said Akerlof’s brother, Carl. “Whatever path they chose seems to have worked very well — I believe they have enjoyed an exceptionally happy and loving relationship.”
When the National Organization for Women began calling for Yellen to lead the Federal Reserve last summer, the petition quickly went viral. The campaign spread to the liberal blog Daily Kos, which rounded up 130,000 signatures. More than 500 economists signed a letter urging her appointment. About 125 women in power, including pioneering feminist Gloria Steinem, sent a letter to Congress.
“For her to get the job, we’re going to have to show Washington that Americans are ready for an accomplished female economist to lead,” read a petition from women’s rights group UltraViolet.
Activist groups do not usually get involved in Fed nominations, as monetary policy does not tend to stir the grass roots. But Yellen — much to her surprise, according to those close to her — became a cause celebre during the battle over her nomination last year. To many women’s groups, she was the ideal person for the job. And she seemed to symbolize the struggle of hardworking women who steadily climb the ladder of success — only to find the final rung blocked.
Yellen was not Obama’s first choice to run the Fed. Her rival was Lawrence H. Summers, a Harvard professor and one of her former students, who had been a top economic adviser to Obama during his first term in office. Summers was the architect of the president’s stimulus plan to combat the recession and won his trust as a stalwart leader during a crisis.
But Summers had also made enemies over his years in Washington and alienated several key Democratic senators when he called for deregulating banks as Treasury secretary in the Clinton administration. To make matters worse, Summers suggested during a speech at Harvard in 2005 that the small numbers of women in math and science could be because of “innate” differences between the sexes. The remarks caused an uproar at the university and across the country — and women’s groups were determined to stop him from getting such an influential position.
The controversy turned the Fed nomination into an impassioned debate over women and leadership — a topic that Yellen had hoped would not enter into consideration, according to close confidants.
“We were encouraged as women in the economics profession to hide our gender differences,” said Sylvia Ann Hewlett, who received her PhD from the University of London in the early 1970s. “The way to succeed was to behave like the guys, to pretend you were identical. I think we lost a big piece of ourselves that way. . . . If you are a wife and a mother and managing a household, you have a much more grounded take on everyday struggles than a lot of men of that period.”
Indeed, Yellen’s ability to connect economic theory to ordinary life has been one of the defining characteristics of her career. Obama cited her understanding of the “human costs” of high unemployment when he nominated her to lead the Fed in October.
“America’s workers and their families will have a champion in Janet Yellen,” he said.
Then the president continued: “I should add that she will be the first woman to lead the Fed in its 100-year history. And I know a lot of Americans, men and women, thank you for not only your example and your excellence but also being a role model for a lot of folks out there.”
Yellen smiled broadly, stepped up on the podium and didn’t mention the historic moment again.