What Explains Differences in Finance Research Productivity During the Pandemic?

Brad M. Barber is Professor of Finance at the University of California Davis Graduate School of Management; Wei Jiang is Arthur F. Burns Professor of Free and Competitive Enterprise in the Finance Division at Columbia Business School; and Adair Morse is Associate Professor of Finance at the University of California Berkeley Haas School of Business. This post is based on a recent paper, forthcoming in the Journal of Finance, authored by Mr. Barber, Ms. Jiang, Ms. Morse; Manju Puri, J. B. Fuqua Professor of Finance at Duke University Fuqua School of Business; Heather E. Tookes, Professor of Finance at Yale School of Management; and Ingrid M. Werner, Martin and Andrew Murrer Professor in Finance at The Ohio State University Fisher College of Business.

Based on a survey of American Finance Association members in late 2020, this study explores disparate impacts of COVID-19 on research productivity and tests the main channels that could have contributed to the findings. We received 1,440 responses, 85.4% of which are from faculty members. Most of the survey responses are reported in Likert scales (from 1 to 5), which is accommodated by ordered logistic models. Because the pandemic hit everyone by complete surprise, and because the regressors in our models represent mostly pre-existing characteristics, endogeneity should not be a major concern for most of the inferences we made.

During the pandemic, 78.1% of faculty respondents report a decrease in research productivity and 60% report spending less time on research, while 14.5% of faculty report an increase in research productivity and 21.5% report spending more time on research. The variation in research effects relates to predetermined factors—family structure and gender. Research productivity of women and faculty with children, especially very young children (ages 0 to 5), is particularly negatively impacted by the pandemic, and these two factors appear to work independently without a significant interaction effect. Thus, the pandemic could set back recent efforts to ameliorate the gender disparity in academic finance. Also negatively impacted are junior faculty of both genders, as they are more likely to have young children and experience professional isolation. Because junior faculty are the group for whom current research productivity will have the greatest impact on future career outcomes, the impact of these distortions may have profound effects on research and on the profession as a whole.

Motivated by the variation in survey responses highlighted above, we examine three mechanisms that generate disparate effects on research output: time allocation, productivity, and institutional factors. Our first test targets the time allocation mechanisms by asking the respondents to report changes in time allocation to tasks other than research. As expected, we find that faculty with children spend more time on childcare and domestic chores while cutting back on time spent on research, leisure, and sleep. In contrast, time spent on teaching is unaffected by the presence of children, perhaps because teaching is a task with fixed deadlines that requires immediate attention. What is probably less expected is that women spend more time teaching and less time on research, even after controlling for family structure. Given the substantial evidence of bias against women (especially junior women) in teaching evaluations, the pressure to gain favorable teaching ratings—an important component of tenure and promotion considerations—may elicit more effort from women in the transition to online teaching. Such a disparity in teaching burden could exacerbate the gender gap in research productivity.

We next study the impact of changes in time allocation on research productivity. Time spent on teaching, childcare, and chores are all important determinants of research productivity, with time spent on childcare and chores having a particularly strong negative effect. These two activities absorb the effects of the predetermined family structure variables (but not gender). Holding all other covariates constant at sample means, senior (junior) faculty who report spending “much more” time on childcare are 54.7 (47.2) percentage points more likely to report “much less,” time on research. This is much higher than what have been documented during the “normal time.” Moreover, these marginal effects still understate the total expected effects on junior faculty because they are also more likely to have young children, as 37.7% of junior faculty report spending “much more” time on childcare versus 29.4% of senior faculty. Combining both the composition effect and the marginal effect, a junior faculty member has a 17.8 percentage point higher probability of reporting the most extreme negative research outcome as a result of “much more” time spent on childcare (47.2 percentage point marginal effect times the 37.7% probability of reporting “much more” childcare), compared to 16.1 percentage points for senior members, due to the latter’s lower exposure to a childcare burden.

While time diverted from research is a major factor behind drops in research productivity, the suspension of professional conferences and other traditional opportunities to disseminate research and obtain feedback also poses challenges. Moreover, faculty may feel isolated or overwhelmed by concerns about their own health and well-being. This second mechanism affects productivity even for fixed units of work time, and can contribute to reductions in productivity independent of time allocations. To capture the effects of this “production mechanisms,” we study self-reported well-being (concerns about physical and mental health) and two characteristics essential to the research development process, namely feedback and isolation.

After controlling for time allocations, concerns about feedback, isolation, and health have independent negative effects on research productivity. Senior (junior) faculty who report “much more” concern about feedback are 49.9 (41.7) percentage points more likely to report the most significant negative effect on research productivity. While the marginal effect looks similar between the two groups, junior faculty are much more likely than senior faculty to have the highest level of concern about a lack of feedback (38.9% versus 22.6%). Hence, the expected effect of the highest feedback concerns among junior faculty is more than 40% greater than that among senior faculty (16.2 versus 11.3 percentage points). The marginal effects of health concerns on research outcomes are also large, but less pronounced than those related to feedback concerns (46.9 and 30.3 percentage points for senior and junior faculty, respectively). Again, because junior faculty are much more likely than senior faculty to have these concerns (30.7% versus 15.2%), the expected effect gap is larger for junior rather than senior faculty (9.3 versus 7.1 percentage points). The marginal effects of isolation concerns are similar to those of feedback and health concerns.

Finally, we turn to potential mechanisms due to institutional factors. Of the various policy responses, we focus on tenure clock extensions, which were intended to compensate for loss of research time, loss of access to data or lab space, and additional time required to adapt to new teaching models. Junior faculty employed by institutions that extended the tenure clock report a decrease in research productivity. Though perhaps surprising, this may have been the desired effect, as universities made efforts to accommodate faculty experiencing pandemic-related stress and disruptions. However, these policies do not appear to reduce pandemic-related stress: junior faculty at institutions with tenure clock extensions are no less likely to report feelings of isolation, concerns related to timely feedback, or overall health concerns.

The varying effects of COVID-19 that we document have implications that extend beyond academics in finance and beyond the specific setting of COVID-19. If administrators are not deliberate in their policy responses to the pandemic, the sharp decline in research productivity reported by faculty with children and female faculty will have lasting impacts on careers and the diversity of individuals contributing to knowledge production. We caution against one-size-fits-all policies (e.g., uniform tenure clock extensions) since they may exacerbate rather than address the disparate productivity effects of the pandemic (echoing the unintended disparate effects of gender-neutral parental leave policies). Our findings support policy responses that account for the disparate effects of a common negative shock.

The complete publication, including appendix, is available here

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