Collaborating on Research to Better Understand the Economy

Andrea Caceres-Santamaria: Welcome to the St. Louis Fed's Women in Economics Podcast Series where we interview women who are making their mark in the field of economics.

I'm Andrea Caceres-Santamaria, your host. In this episode, we hear from Anna Paulson, executive vice president and director of research at the Federal Reserve Bank of Chicago. Anna is an expert on financial markets and institutions with particular expertise in the insurance industry. Her research investigates how households and firms adapt to incomplete financial markets and how households' financial decision making is influenced by exposure to institutions and economic events, including financial crisis. Her research has been published in leading scholarly journals, including “The Journal of Political Economy,” “Review of Economics and Statistics,” and “Review of Financial Studies.” And she is a Board member of the American Economic Association's Committee on the Status of Women in the Economics Profession.

Anna, we are so glad to have you on the Women in Economics Podcast series from the St. Louis Fed. Welcome.

Anna Paulson: Thank you so much. I'm so excited to talk to you today.

Caceres-Santamaria: As we mentioned, you are the director of the Chicago Fed where you lead the research and policy analysis work. You also oversee the department that provides analytics support for monetary policy making and conducts research on banking and financial markets, macroeconomics, microeconomics, and regional economics. Talk about your role at the Chicago Fed.

Paulson: So thanks for that question, yeah. So I lead a group of about 150 people and 10 teams. And so we have responsibility for understanding economic and financial events and regional developments. one of the main things that we do is prepare Charlie Evans for his role at the Federal Open Market Committee. I think of us as kind of like the research and development arm of the Chicago Fed. We conduct research in a wide array of economic questions ranging from community development all the way to what's going on in the stock market.

In addition to the research piece, we're also focused on telling our story externally. So one of the things that I'm responsible for is the external communications component of the Chicago Fed. So all of our speeches, all of our external website, our publications, our social media presence and so on. And so you really get to see we're producing the content and then we're sharing the content, and really trying to help people understand what the Federal Reserve does, what the Chicago Fed does, make sure that folks who are interested in understanding what's going in the economy have good evidence-based materials to help them understand what's going on.

Caceres-Santamaria: Great. Thank you so much. We appreciate you sharing that information. Now let's talk about your career. You came to the Chicago Fed as an economist in 2001 after serving as an assistant professor of finance at the Kellogg School of Management at Northwestern University. Do you see any parallels in your current role to teaching students?

Paulson: You know, there are some parallels. I would say that one of the things that really struck me when I made that transition from academia into the Fed was how different it was to work collaboratively to produce policy analysis and thinking around economics. So when you're a professor, you are working on your research, and you're teaching your students, and you might have coauthors, and there's certainly other people who are doing the same things as you, but it's kind of an individual sport. Whereas I think of what we do here as a team sport, and that has led to I have different relationships with my colleagues, and I appreciate my colleagues in different ways. So it takes all of us –one person is going to work on what's going on with consumption. Somebody else is going to be studying what's going on with labor markets. Someone else is going to be studying what's going on with financial markets. And when we put all of that together to understand, say, what's going on in the economy right now before an FOMC meeting or before some other major briefing, I can see how each person is contributing a little bit to that mosaic of our understanding of what's going on in the economy, and I really like that feeling of being part of a team.

Caceres-Santamaria: I like how you use the term mosaic, of being part of that mosaic to put everything together. And I think what you point out about going from that teaching role to now working collaborative as a team, I think that's relevant to a lot of people who are transitioning, whether it's being an individual student into a new career and joining a team, or again, transitioning from a job where it was just you to now working collaboratively, so that's great to point that out. I think that's relatable to many.

Paulson: Let me follow up on that, because there's a transition that our new research assistants have to make that's kind of similar, I think. You know, you come to the Fed, it's your first job, you're going to work as a research assistant for example, you know, supporting the research and policy work that we do. And sometimes it takes people a little bit of time to get acclimated to working as part of a team, especially when you're coming right from being a student. Right? When you're a student, when you collaborate, sometimes you're not allowed to do that, right? That's cheating. Whereas here, we want people to collaborate. We want you to build on whatever somebody else has discovered. We want you to solve that programming problem really quickly, and if somebody else already knows how to do it, please borrow from them. But there's that transition from working independently as a student, as a faculty member to working as part of a team, which some people just love and other people are like, “Whoa, this is really different.”

Caceres-Santamaria: And I think that also points out that economics, while some people may think is just you on your own doing analysis, it actually takes a team to put all of this information together for it to be accurate and presented to the public. So it's really great. Thank you for adding to that.

Let's talk a little bit about your education. You received a bachelor of arts degree from Carleton College and a PhD in economics from the University of Chicago. How did you choose to study economics?

Paulson: So what drew me to economics originally when I was an undergrad was I liked all of my classes. I had a really hard time narrowing down and deciding I wanted to focus on one thing or another. And first of all, economics itself was broad. And then second, and maybe this doesn't speak well for me, but economics required the fewest number of classes to major, so it really let me dabble in a lot of other things, and I think that breath is something that I've really appreciated about economics as I've gone on. You have the breath both in terms of what you can study, what you can research, how you can contribute. So everywhere from financial markets, to development economics, to financial literacy, to labor economics. Right? There's just this huge range of things that are within the realm of things that economists study and add to knowledge.

And then you can do it in so many different ways. Just in my own career, right? I've been in academia. I've been at the Fed. In the Fed I've been in some roles where I've been much more focused on policy. I've been in some roles where I've been really focused on research. I've been in other roles where it's leadership that matters. And so the breath both of what you can study and the different ways that you can apply economics in terms of your career and your role really have been what drew me into economics in the first place and kept me here.

Caceres-Santamaria: For many people, work has to feel meaningful and impactful, providing us the sense that we're making a difference. How has your work in economics or other work that you've observed that others do shown you how economics is a tool to make a difference and make an impact on a number of matters that effect different people?

Paulson: So some of my earliest experiences as an economist, so this started when I was working on my PhD and then continued when I was at Kellogg. I was working with Rob Townsend on a project to try to understand growth and inequality in rural Thailand, and we were gathering our own data. So I would travel off to Thailand and we would have a questionnaire that we were developing that we'd need to translate from English into Thailand, and then we would sit with families and try to understand. We would say, “Here's our questions.” We might ask them like crazy economics questions, like, “Tell me about your wealth,” and then we would get into conversation with them and learn that, you know, you can't really have a conversation with somebody about a variable in an economic model. You really have to break it down and communicate with people in the context in which they live. So if it's wealth in the context of a Thai village, it's, “Do you have any water buffalo? Do you have a refrigerator? Do you have a bicycle? Do you have a walking tractor?” And that process of going from an abstract model to peoples' lived experiences was one of the things that I found really interesting and exciting, and it's also I think a way that you see how these concepts that you might learn about in school or through reading a paper are really showing up in peoples' lives, so they really matter. So if that person that I'm talking to in real Thailand has a walking tractor, or has a pickup truck, they are much wealthier, they have a lot more opportunities, and then you can see that as you continue the conversation. You know, “I've got a pickup truck and I get paid by my neighbors to transport things around, and so I have some extra money, and I'm using that money to send my daughter to school.” So you can really kind of trace the importance of economic concepts into peoples' lives. So that's one way I think that I find economics meaningful, because it just helped me understand and organize my thinking about the world and what I was seeing in it.

Another thing that I think is just really meaningful and I feel this just about every day at the Fed is we have this incredibly big and important mission, right? We're doing monetary policy, financial stability, supervising banks, the payment system. And so if I or somebody on my team makes a tiny improvement, it can have a huge impact on peoples' lives, right? The Fed processes something like $5 trillion in payments every day. So imagine that you come up with a way of doing that just a tiny, tiny bit, just a minuscule improvement in the safety and security of that process, that impacts so many peoples' lives. Or if our research develops a little bit better way of analyzing economic conditions so that we can forecast inflation or unemployment just a little bit better, and that means that monetary policy is a little bit better, that we're able to have low and stable prices and maximum employment more times, even if it's for another half an hour, right? For a giant economy, that still improves peoples' lives a lot. And so just the scale at which you can impact public policy at the Fed is really both inspiring and exciting and it's a big responsibility too.

Caceres-Santamaria: Even though it may seem like just a few seconds or a few minutes or something faster and quicker, it can definitely mean a lot for millions of people in terms of just making things more efficient for others.

Paulson: Absolutely.

Caceres-Santamaria: Excellent. Thank you. So this podcast series launched in 2018 as a way to share the experiences of women who are making their marks in the field with the goal of inspiring more women and members of underrepresented minorities to consider studying and working in economics. The Federal Reserve itself has been criticized in the area of diversity. So I want to ask you what are you doing? What is the Chicago Fed doing? What is the Federal Reserve System doing to represent a more diverse set of voices? And where is there more work to do?

Paulson: So thank you for that question. That is a super important topic. And I can answer this question in so many different ways. And so what I want to start with is when I started in economics, about 30% of PhD students were women, about 30% of assistant professors were women, and something a little smaller than that of full professors who were women. And now what is it? You know, 30 years later, and those percentages are kind of the same. About 30% of PhD students are women, about 30% of assistant professors are women, and we haven't made a ton of progress. And it's really important that we understand why that is. And I think when we look at representation of women in economics – well there was a lot of progress, say, up until around 1990 or so. We've kind of stayed at the same level for the last 25 – 30 years. But other fields have made more progress in terms of the representation of women over that time period. So you have to ask yourself, is there something about economics itself, about the culture of the profession, about what we do that makes people think, “You know what? That's not for me.”

So that's a question we have to ask ourselves, and that we are asking ourselves I think increasingly both at the Chicago Fed, but then also in the profession. There's an outpouring of research on the profession itself, and that part I think is really fascinating, where we're using the tools of economics to understand why is representation the way it is in economics. Sometimes it's just describing representation, but sometimes it's also trying to understand why. And I think that using the tools of economics to try to understand what the issues are, and then to come up with solutions is a really promising avenue, right? Like we're studying ourselves, and that both with self-reflection, the self-knowledge, and then the things that we can learn through that process seem like a really important part of a solution.

Some of the things that we're doing here – you mentioned the Committee on the Status of Women in the Economics Profession. When I was on the Board in 2005 to 2008 we started the American Economic Association Summer Program where the Chicago Fed, Brookings Institutions, lots of other Feds and other institutions hire women or underrepresented folks in economics for summer fellowships. And so that was just starting. And now that's something that's matured. Every year at the Chicago Fed we have usually three summer fellows who are women, who are either PhD students or in early stages of their career who are working on topics where somebody here in the Chicago Fed can be a good mentor for them. And over the summer, the fellows interact with one another, they interact with the rest of the research department, they present their research, they get feedback on their research. And sometimes we develop lasting relationships and folks come back and give seminars after they've gotten jobs in academia or whatever. So that's one thing that we're doing.

The other thing that I've really seen a change in over my career is when I first came to the Chicago Fed and we would hire research assistants, we mostly just hired from our local universities. We'd talk to folks that we knew at Northwestern or at Chicago and we would hire locally. Now our research assistants come from all over the place nationally, and they also come from a range of universities. Some fancy private universities, some state schools, some historically Black colleges and universities, some universities that serve primarily a Hispanic population. And so the diversity of that research assistant group, which is one pathway into getting a PhD, has really increased a lot.

Caceres-Santamaria: And I have also seen that you have done a number of interviews for the Exploring Career Pathway Series. It's a collaboration with the Sadie Collective.

Paulson: Mm-hmm.

So can you speak a little bit about that work, about that collaboration in terms of reaching a diverse set of audiences, and also inspiring young women to join the field?

Paulson: Absolutely. So thank you for that question. So the Chicago Fed has a formal partnership with the Sadie Collective, and the Sadie Collective is an organization that is working to improve the opportunities for Black women in economics and in other quantitative fields. So we talked about women in economics where women are maybe 30% of PhD students. If you look at Black women in economics, I was trying to calculate this for some work I was doing recently, and I think we decided that there are probably fewer than five new PhDs each year who are Black women. Right? So this is a really underrepresented group in economics. And it's tough to be an underrepresented group in any field, and so the Sadie Collective is this really exciting organization.

One of the things that's exciting about it is it is created by young Black women, and so it's not the elders of the field figuring out what folks need. It's a really grassroots organization, so there's a lot of energy and excitement. And we're really excited to be able to tap into that and to partner with them in various ways.

And so we've been holding a conference every year. I think this will be our third or fourth year. The conference is about exploring career pathways, and there's opportunities for the participants to hear from people who are doing a variety of things in economics and at a variety of stages of their career. So just learn more, try to demystify the field, try to let people see, like, “Hey, there's folks who look like me and sound like me who are succeeding in this field.” And also create some relationships so people can connect, and ask questions, and feel welcomed into a field that really needs their energy, their questions, their background so that we're asking the right questions and making the kind of impact that economics can make in the world.

Caceres-Santamaria: There's a couple of things that you mentioned that play a key role in bringing a diverse set of perspectives or women into the field, which is seeing themselves, seeing people like them in the field making an impact. So thank you for sharing all of that.

You have another really important role that you touched on a little bit earlier at the American Economic Association as a board member for the Committee on the Status of Women in Economics Profession. Can you tell us a little bit more about that?

Paulson: Sure. So the American Economic Association, Committee on the Status of Women in the Economics Profession, let's call that CSWEP, because that's a mouthful, is a committee that has as its goal making sure that women can succeed in economics. And the committee does a number of things. One thing that it does every year is gather and publish data on representation of women in the profession so that people have accurate information across the profession. So this is gathering data from lots and lots of universities and other institutions to track representation overtime. So that's one thing that they do.

Another thing that the committee does is mentoring. And the mentoring programs, one of the things that I love about them is that they have been studied in a randomized controlled trial to show that they have an impact on women's careers in economics. And so early on when these mentoring programs were being started, if you applied to be in the mentoring program and we didn't have enough space to accommodate everybody who wanted to apply, you could be randomized into a treatment or a control group, and then we were able to track folks. So researchers tracked folks to see the impact of the mentoring on their careers and found that folks that were mentored were more likely to be promoted, had more publications, and succeeded more overall. And the really interesting thing about trying to peel back the black box of how that mentoring worked, so the mentoring program was like a couple days. People are matched with other new PhDs or junior faculty who share their research interests, and then they spend a day together with senior women in their field, and it's all very programmed and there's discussions about a wide range of things, some things about careers, some things about research specifically, but a lot of the mentoring actually happens is peer mentoring. So you've been matched with a group of women who are at the same stage of their careers and who are interested in the same economic subfield as you. And what happens is those folks then talk to one another. Some of them form writing groups. Some of them will jointly propose a session at a conference. They'll invite one another to give seminars. They provide feedback and connection with one another. And I think that's what you kind of miss when you are one of a small number in a field.

And even though women are 30% of the economics profession, there are still a lot of women who are teaching at an institution where they might be the only one, or maybe they're one of two. And so by building these networks and these mentoring groups, you're creating community across the country, sometimes internationally as well. It looks like that's really helpful.

Caceres-Santamaria: Thank you so much for sharing about the research that was done on the positive effect that mentorship has, and more than anything about the long-term effect that it has about women seeing themselves in the profession and staying in the profession.

So lastly, is there anything else you'd like to discuss about women in economics?

Paulson: So I think that there's both nothing special about being a woman in economics, and then there's something really special, right? And so I think it's important that we don't think about that there's economics that women do, and there's economics that men do. We've got a paradigm. We've got really interesting questions.

What's important though is that we're approaching economics with an open mind. We talked a little bit about the role that economics plays in public policy and plays in millions of peoples' lives and livelihoods. And it's really important that especially when we're doing economics that's going to influence policy that we are considering a wide range of perspectives, and so that makes it really important that the profession is representing a wide range of perspectives itself. The questions that we're interested in, the topics that we pursue that we're passionate about often find their origins in some experience that we've had as individuals, and it could be where we grew up, it could be where our parents grew up, it might be just something specific about how we see the world. And all of that means that we need to make sure that the field is open and welcoming and embracing a wide range of perspectives so that we're asking a wide range of questions, and we're not just getting narrowed into some well-trodden path. There's really interesting things going on in the periphery. There's really interesting things going on when you can connect one field with another field. And having a diversity of experiences and backgrounds helps us to make sure we're really covering the ground well and making the contribution that economics can make to sound public policy and to improving peoples' lives.

Caceres-Santamaria: Well, I appreciate you once again sharing with us the impact that economics has and how it can be meaningful work, and in terms of women how women add to that variety of perspectives that are needed in order to make good public policy or impact other parts of the economy and the world with solving problems using economics. So thank you so much for sharing your insights on all of that.

Paulson: You are very welcome. This was a fun conversation.

Caceres-Santamaria: To hear more from the Women in Economics Podcast Series, visit www.stlouisfed.org/womeninecon. You can also find every Women in Economics episode on Apple Podcast, Spotify, and wherever you like to listen to podcasts.

Anna, thank you so much for sharing your time. Your career and experiences are so inspiring, so once again, thank you.

Paulson: Thank you so much.