Entrepreneurs, Mothers, Children – This Is Prejudice Or Reality?


It is possible that having children, becoming a mother, is simply something that happens in life and that doesn’t then affect nor influence other parts of that same passage from cradle to grave. It is also possible that it is an event that changes attitudes, aptitudes and desires. This would appear to be an empirical question, not something we either should or even can have an ideological commitment to or view of.

That isn’t how it works of course. Instead just about everyone has that prejudice well on display and near no one stops and asks, well?

Which is the starting point for this:

The daughter of one of Britain’s richest men has launched a searing attack on gender inequality in business, accusing bankers of creating a “toxic culture” for women. Shanu Hinduja, whose father, Sri, and uncle Gopi, topped The Sunday Times Rich List last week with a fortune of £22bn, said female entrepreneurs were frozen out by a “deeply patriarchal” system that often refused to fund their ventures. She added that mothers were particularly penalised as many male investors doubted they would focus fully on their work when they had a young family.

We’re back to our old economists’ distinction between taste and rational discrimination:

She said the industry was still “deeply patriarchal” and remained “off-limits” to women, adding: “It remains widely accepted among investors that women — especially those of childbearing age — aren’t going to give their business ideas their full efforts and attention.”

The question being, well, not should it be true, not should they think that even, but is it true that mothers of young children focus a little less on their brand spanking new business adventure?

My own reading would be, on average, yes. This doesn’t tell us anything at all about any specific individual, it just tells us something about the distribution of desires across the population. We really do find that fathers make more than non-fathers, mothers less than non-mothers. These two points alone are enough to describe the entirety of the observed gender pay gap.

So, if it is in fact true that women with children aren’t quite as committed – on average – then what is the investor supposed to do? Ignore reality?

Which is, as Gary Becker pointed out, the great joy of a market based system. Whatever your prejudices once you start interacting with that reality out there it’s going to come bite you on the bum. If it is just simple prejudice then investors who succumb to it are going to make less money than those who don’t – the solution is in the system. And if it isn’t prejudice but just that reality then we might not like the message we’re getting but that is, well, you know, that’s just reality, isn’t it?

Unlike many news organisations, we chose an approach that means all our reporting is free and available for everyone. We need your support to keep delivering quality journalism, to maintain our openness and to protect our precious independence. Every reader contribution, big or small, is so valuable.
For as little as £1 (£10 if you were at OxBridge) you can support us – and it only takes a minute. Thank you.

Click Here To Make A Contribution - Tim & The Team