Economics

Where Are the Female Billionaires?


Christy Walton is the world’s richest woman thanks to her 12.4 percent stake in Wal-Mart Stores

Photograph by Alberto E. Rodriguez/Getty Images

Christy Walton is the world’s richest woman thanks to her 12.4 percent stake in Wal-Mart Stores

The Piketty-fueled debate about wealth inequality continues to rage. So do conversations about gender equality. At the intersection of the two comes a new report from economists Caroline Freund and Sarah Oliver of the Peterson Institute for International Economics, who point out that the rich who are getting richer are disproportionately, overwhelmingly men:

The Forbes billionaires list, a small group that controls 3 percent of global household wealth and whose total net worth amounts to about 9 percent of world GDP, highlights this issue. Female billionaires make up only about 10 percent of the total entries on the 2014 Forbes World Billionaires list.

In the U.S., it’s better but only slightly: Bloomberg News counts 10 women among 67 American billionaires.

This may not be all that surprising, but it hasn’t always been the case, at least not in America. Extreme wealth was once primarily a result of inheritance—a social reality with its own set of problems, but nonetheless one in which women fared far better than they do today. In 1969, women made up an estimated half of the wealthiest 0.01 percent of Americans, according to Columbia University economists Lena Edlund and Wojciech Kopczuk (PDF), who have combed through estate tax records from the last 100 years. By 2000, women made up only one-third of this group. Edlund and Kopczuk believe that’s because, beginning in the 1970s, changes in technology increased the returns to successful entrepreneurship. Starting a business became more profitable than good breeding, and wealth dissipated across generations.

In a way, this is good news. Very few people, economists or otherwise, argue in favor of family dynasties and against social and economic mobility through entrepreneurship. Edlund and Kopczuk’s work suggests our current state of wealth inequality comes at least partly from hard work, ingenuity, talent, and luck—who doesn’t want that? It also means, however, that despite huge gains in gender equality, women control a smaller share of America’s growing wealth because they have not been as successful as entrepreneurs.

There are lots of theories about why this is so. For starters, women are less likely to be entrepreneurs (PDF) in the first place. Among women who do start their own ventures, there’s evidence that suggests achieving astronomical success is harder. In addition to luck, building a multibillion-dollar business requires an outsize combination of moxie and capital. In that order: Men tend to be overconfident, relative to women; women entrepreneurs also report a harder time getting venture capital financing. Less than 10 percent of venture capital investment goes to women. Timing matters, too. Building a billion-dollar business takes years of tireless dedication. It’s hard to balance 80- to 100-hour workweeks if you want to have a family and see them occasionally, traditionally more of a concern for women than men.

It’s important not to lose sight of the fact that we’re talking about a tiny sliver of the global population. For most women, economic equality has improved. The share of women among the top tenth of 1 percent of earners—a measurement of income, not wealth—has increased sixfold since the 1970s. And women make up almost half of the not quite as rich but still very comfortable top 1 percent.

Although, as Freund and Oliver point out, the disparity at the top of the top is more than worthy of note: “The growing concentration of wealth in the hands of a few is itself disturbing,” they write. “That these few are almost all men makes it even more so.”

Schrager is an economist and writer in New York City. Follow her on Twitter: @AllisonSchrager.

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