This 23-minute podcast was released Dec. 12, 2018.
“I never even considered taking an economics class, because I thought it was business. I thought it was about making money,” says Louise Sheiner. Sheiner is the Robert S. Kerr senior fellow in economic studies and policy director for the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.
She talks with Maria Hasenstab, senior media relations specialist at the St. Louis Fed, about how she stumbled into economics after studying biology, her work in health economics and why she thinks high school debate could spark girls’ interest in econ.
Maria Hasenstab: Hello. I’m Maria Hasenstab and you’re listening to Women in Economics, a podcast series from the St. Louis Fed’s Timely Topics audio channel. Today I’m speaking with Louise Sheiner of the Brookings Institution. Hi, Louise.
Louise Sheiner: Hi. How are you, Maria?
Hasenstab: Good. Louise, you’re the Robert S. Kerr Senior Fellow in Economic Studies and policy director for the Hutchins Center on Fiscal and Monetary Policy. Tell me about Brookings and the work you do.
Sheiner: So, Brookings is a think tank, uh, meaning that it’s basically a non-profit organization devoted to policy-oriented research and analysis. And at Brookings I work for a Center that’s within Economic Studies, as you said. So, our mission at the Hutchins Center, we view it as improving the quality of fiscal and monetary policy and also improving the public understanding of fiscal and monetary policy. So that means that our work is really quite broad, both in terms of the topics we address, since fiscal and monetary policy is a really huge area, and also the ways we address them. So, for example, right now we’re working on a very big project that’s about improving the measurement of productivity growth. So, that’s a very macro-economic project. And I’m also working on putting together a conference on prescription drug prices and ways to lower them while maintaining the incentives for innovation in the prescription drug area. So that’s, sort of, on the improving the quality of fiscal and monetary policy end of it. On the educating the public end, we also have a video game about the federal budget. It’s called The Fiscal Ship. And we use that to educate college kids and high school kids. And, you know, we put Facebook ads on for people to play the game to learn about the long-term budget challenges that we face in this country. And in addition to working on the game and putting together conferences, I also do my own research. And my research interests are also quite broad. So, in the past few years for example, I’ve worked on a paper on the impact of low interest rates on optimal fiscal policy, on understanding the differences and similarities between GDP and measures of public welfare and in a number of issues related to health economics.
Hasenstab: Well that sounds like some really important, interesting work you guys are doing. Your undergraduate degree from Harvard is in biology.
Hasenstab: So tell me how you stumbled into economics.
Sheiner: Yeah. So I never even considered taking an economics class in college. My dad was a doctor, came from sort of a family of doctors. And so I started off premed. Sort of quickly moved away from that into evolutionary studies and ecology. And then in my senior year, I wanted to take a class on food policy, and the prerequisite was to at least be enrolled in economics 101. It was Ec 10 at Harvard. And so I did it just because I had to, and I totally loved it. I mean, I remember sitting up in bed in college just reading Samuelson because I thought it was so interesting. And so it really, really just got me. And so I had really just that one economics class when I graduated from college.
And I took a microeconomics class in summer school after I graduated, and then sort of taught myself macro, then you had to take subject area GRE, so I taught myself macro so I could take the GRE's. So really went to graduate school with very, very little economics.
Hasenstab: Were you nervous about starting a graduate program with something that you had a little bit of background in? Or was that kind of exciting?
Sheiner: It was really exciting. I mean, I was a little nervous. I remember the first week of math camp that they had before graduate school, because I also did not have a lot of math and I felt like, “Oh my god. I don't know if I can do this.” But what I used to say is for me, graduate school was so much fun because instead of learning the things that I had already learned before, like most of my classmates just learning them sort of more in detail and with more math, I was like being introduced to many concepts for the first time. And so actually, I think it was very useful for me. I was very able to focus on the intuition behind the concepts, because I was sort of learning them at a deep level the first time. And I think that has trained me very well, and that's kind of how I think about economics in general, is I'm always trying to figure out, like, what is the story? What's the underlying intuition?
Hasenstab: That's a great perspective that you were learning at that graduate level for the first time.
Sheiner: Yeah. I think it was different. Frankly, I'm not sure I could get in today with that kind of background. I think I was very lucky. I tell my research assistants about this all the time, which I always want to ask them what the economic story is. Not just the math, not just sort of how you got from A to B, but really what is the story. And I think that's a very useful thing to try to do, regardless of how you approach economics, whether you've had a lot or little.
Hasenstab: Now, what were those university classes like? Were you a minority as a woman? And if so, how did that feel?
Sheiner: So like I said, I had one economics class and I don't recall anything except loving it. In graduate school, we actually were, I remember, 10 women out of 40. So there was quite a few women. I know some of them dropped out before they finished, but I don't know how many of the men dropped out, so I actually don't know whether or not they dropped out more. But we had quite a few women and I think that you know 25 percent of the class is probably even higher than the average today, so we certainly haven't made any progress since way back then.
So no. I don't think I felt like a minority, really. But you know, one of the things that's really interesting to me, and as I was thinking about sort of participating in this program, and thinking about what it meant to be a woman, and going back and thinking about it, you know, back then I think, in a way that is hard to understand today, we just sort of accepted it that this was a male thing. And maybe almost even felt like, wow, look at this. We're playing with the boys, because we didn't realize that that's not the way it should be. And I think that this moved towards talking more about inclusivity of women, underrepresented minorities has really kind of infiltrated my thinking. And now when I go into a conference or I see a panel and it's like 90 percent white males, I'm thinking, “What is going on? Why is the world being run in this sort of incredibly narrow viewpoint?” And it really bothers me now, but it didn't back then. Back then, I just think I accepted it.
Hasenstab: Well, you said it really bothers you now. Do you have any thoughts or suggestions on things we can do to encourage more, not only women, but also underrepresented minorities to pursue the field of economics?
Sheiner: Yeah. I think there's a few things. As I said, I never even considered taking an economics class, because I thought it was business. I thought it was about making money. It was just like not something that interested me. And I think that that is often a perception about what economics is, and that's just so wrong. I mean, economics is about trying to make the world a better place. And I think that if it was sold that way, it would be more appealing to women and also to underrepresented minorities. Especially if they thought it was relevant to their communities, right? So the idea is if you want to make a difference, there's very many ways to making a difference. And sort of one way is sort of one-on-one. You can be a teacher, a doctor, a nurse and sort of you feel that you're making a difference. Economics, you are making a difference. You don't get that immediate kind of satisfaction of seeing it, right? Because we're all just contributing in small ways to trying to make policy better, but that is at least what you're trying to do. So I think selling it that way would be really helpful.
And then of course just having more role models makes a really, really big difference. If you don't see people like you doing it, then you're much less likely to think of yourself doing that. And if you say, “I'm really interested,” and you try, and you have any kind of setbacks, well, you're just going to see, “I knew there was a reason that I didn't see women doing it. We're not good at it,” or something like that. So I think both sort of having it sold is something that is kind of broader than what the typical person thinks about economics and having more role models is quite important.
Hasenstab: So econ is about trying to make the world a better place.
Sheiner: Yeah. I mean, I sometimes feel that I'm just so lucky that what I do is something that I get to think about what are the problems I see out there and is there anything that I can do to try to contribute to understanding them better? Or thinking about different solutions? To be paid to do that and to have so much fun doing it at the same time is really just amazing. I mean, I love being an economist.
Hasenstab: So prior to Brookings, you spent much of your career at the Federal Reserve Board with stints of the Joint Committee on Taxation, the Council of Economic Advisers, and the Treasury.
Hasenstab: Tell me a little bit about the work you've done and the research you've done.
Sheiner: So my work has been pretty varied. I spent most of my career at the Fed. I started out at the Joint Tax Committee. And I have concentrated, while I was at the Fed, even though it's a central bank, I was sort of concentrating on fiscal policy and health economics. And so I've done work on trying to understand the geographic variation in health spending, I've done quite a lot of work about thinking about how to prepare for an aging society from an optimal fiscal policy perspective. I have done a lot of the work that I did – the policy work at the Fed would be about forecasting government spending, trying to understand the implications of different policies like when the Medicare prescription drug policy was introduced. We had to understand what would happen to, for example, prescription drug prices, which would be something that the Fed would look at when they were looking at inflation. When the ACA was introduced, we tried to think about through all the labor market implications for it. And so it was a combination of my own research in health policy and fiscal policy in general, and then sort of policy work on trying to understand the implications of changes in policy for the economy.
Hasenstab: So looking at your education and career, what were some of your struggles and how did you overcome those?
Sheiner: As I said before, I loved the first four years of graduate school. I thought they were so much fun. I worked all the time, but I just loved it. But writing my thesis was actually a struggle for me emotionally. It's very hard to both come up with a topic, work on it yourself, know that if it works out you can get a great job, and if it doesn't you won't. Or that's what you think. It's not true, but that's sort of what you think. And sort of all your peers are all competing. It's a difficult time emotionally. And I decided I didn't want to do it. And so my first job, as you mentioned, was at the Joint Tax Committee. I decided to sort of go to the most policy-oriented job I could find, which was on the Hill doing legislative work.
But what I discovered about myself is that I actually really like the academic side of it a little bit better. And so whether I was at the Joint Tax or at the Fed or at the Treasury or at the Council, I always found myself sort of veering towards the more academic side as opposed to the sort of detailed policy side. So when I look back, I think that if I'd had more mentors or sort of support, emotional support, if I felt there were people I could talk to about, “Boy, this is really hard,” and people had sort of encouraged me and said, “You know, everybody finds this difficult, but keep at it. You're good at it. You can do this.” You know, I actually might have stayed in academia. I'm not sure. But I think it's important to know that people do struggle and they get through it, and I'm not sure I knew that back then.
And so I've loved my career, so I'm not saying I have any regrets, but I do think it's important. I was actually talking to a young man the other day who is thinking about whether or not he wants to be an academic or work for government, and he expressed the same kinds of experiences. And so I think there are a lot of people who do struggle in graduate school and maybe take the signal from it that it's not for me. And I think that that's wrong. I think writing your thesis is kind of uniquely difficult and that if you get to a place where you're working on stuff that you love and you do it just because you want to find the answer, whether the answer is, yes, my idea was a good one or a bad one, then that really helps with the research process, and I think that's where I am now. Right now I'm like, “This is an interesting idea. I want to know the answer. And whatever the answer is is fine. And maybe it will be a great publication and maybe it won't, but I'm really interested and curious, and so I'm just going to pursue it for that reason.” And that really helps.
Hasenstab: Well now that we've talked about some of your struggles, what are some of your successes?
Sheiner: So if I think about what my successes are, I think that I have managed to do meaningful work in a number of areas. As I said before, I'm pretty broad. And I think I've garnered enough respect within the community that I have a lot of opportunities. So I get invited to present my academic work and I've participated in a number of different panels. So I was on the Medicare Technical Panel, which sort of advises CMS on how to do their projections for Medicare. I've been on a couple of National Academy panels looking at the implications of aging on the macroeconomy, and I'm now on the Social Security Technical Panel, sort of helping to advise Social Security on their long run projections.
And so I feel like I've gotten to a place where I understand a lot of different aspects of the economy and feel pretty confident that I can sort of understand new things as well that I don't know. And I really enjoy that kind of broad understanding. And so I feel like that's a success.
And the other thing when I think about my career, I feel like I learn new things every day, and that I'm constantly growing, and constantly sort of having fun playing with data and reading things that I never thought of before, and finding interesting things to learn, and that I'm just getting to be a better and a better economist every day. And so that really to me is like what makes a successful career. Right? I just feel very lucky that I get to do this.
Hasenstab: Talk to me about your work related to health economics.
Sheiner: Okay. So, I’ve been working on health issues off and on for many years now. And let me just tell you about two of my more recent research papers. So, one of them was looking at the geographic variation in Medicare spending. So, Medicare spends much more per person in some areas, like Miami, than others like Minneapolis. And the difference in spending has often been used to conclude that Medicare is extremely inefficient and some people will say that we could actually solve our long-term financing challenges if we could only just make Miami as efficient as Minneapolis. So, my paper kind of delved into that topic more deeply and showed that the differences in spending across different areas could be explained by the different needs of the population. So, places where Medicare spends a lot have people who are in much poorer health in terms of things like diabetes, obesity, and smoking. And also have much greater rates of uninsurance among the non-elderly. So, because of that, I argued that you couldn’t use the geographic variation in Medicare spending across areas to show that our health system is inefficient. Not that I think the system is efficient, there clearly are lots of inefficiencies. But I don’t think that the variation in spending tells us much about the inefficiencies. And more recently, I’ve done some work trying to understand why healthcare spending growth has been so slow in recent years. So, health spending has long increased faster than the growth rate of the economy. It’s a rising share of GDP. And the expectation that that will continue is actually a major driver of our long-term fiscal challenges.
When people say we have huge budgetary challenges in the future, a lot of that is because of high spending growth on healthcare. Now, right about 2010, health spending growth, both private health spending and Medicare started to slow. And there was a really big debate about whether that was because of the recession or because of the passage of the Affordable Care Act. Um, before the recession, many of us would have thought that health spending would be something that wouldn’t really change too much because of an economic downturn. But that turns out not to be really true. A lot of health spending does actually respond to slow economic growth. So, spending goes down when the economy is not doing well. And so, at least part of the slowdown in health spending is probably related to the recession. But it also turns out that Medicare spending, which slowed just as much as private if not more, doesn’t typically respond to economics. Right? So, older people have Medicare. They’re not working. And so, their income isn’t as affected by changes in the economy. And, um, they tend to not change their spending, uh, when the economy goes down. So, we’re kind of left with a bit of a puzzle. And we don’t fully understand why spending growth has slowed. We don’t know whether or not the slowdown will continue to persist, or whether or not the rapid rates of growth we’ve seen in the past will return. That’s really a key question for thinking about the long-term fiscal outlook. And so, it’s a topic that I really hope to return to, you know, within the next year or two.
Hasenstab: Well, that would be a really interesting topic. Earlier you mentioned the need for more role models. How do you try to serve as a role model? And were you mentored or do you try to mentor women and others entering the field?
Sheiner: Yeah. So I definitely had some good mentors. I said that I had sort of no economics and then I went to graduate school, but I did work at a consulting firm in Washington D.C. between undergraduate and graduate school, and worked for a Ph.D. economist there. And he was quite instrumental in really encouraging me, taking the time to talk about economics with me, and that made a big difference. And so I try to do that with my research assistants, especially the ones that are interested in economics. I really try to take the time when they're doing work to stop and say, “Well, why is this?” And I'm not just getting them to do this, do this, do this, but let's talk about it and what your ideas? I do that quite a bit; men and women. And you know, hopefully my enthusiasm for economics shows through. And the students who I think will make great economists, I really value talking to them. I think they're great to toss ideas back with. So I do quite a lot of that.
In terms of role models, I tell you, so I came to Brookings about four years ago. And one of the big differences between Brookings and the Fed is that the Fed, they don't really want you talking to the press. It's all very controlled. At Brookings, they really love that. And so there's lots of opportunities to sort of be on stage, or to do a podcast, or to write a blog, or all these things that sort of put you out there. And that sort of made me uncomfortable at first, because I just wasn't used to it. But I think it's really important that women are in those kind of positions. And so I agree to do a lot of things that I feel like, “Oh, I don't know if I really know how to do that that well.” Just because I think, “You know what? If I work at it, I can do it well enough.” And the fact that I'm a woman doing it I think is worth it. So I moderate a lot of panels. I've moderated panels on things that are on monetary policy, on sort of international, on a lot of things that are not quite where I feel 100 percent comfortable. It's not my background. But I do it because I think it's important for women to be there and visible. And frankly, the more I do it the better I am at it. So I think it's fine. Like, I don't feel like I've done a disservice to it. And I will just say, it's important for women to be there, so I say yes.
Hasenstab: Why is it important to have more women and underrepresented minorities in the field?
Sheiner: So I kind of think there's three reasons. One is just a fairness reason, right? Like, being an economist is fabulous. I love it. And I think that to the extent there's sort of discrimination, closed doors, sort of any kind of frictions and impediments that's just kind of unfair, and so that's reason number one.
Reason number two is sort of just raw talent. If we are not making it easy for underrepresented minorities and women to enter the field, that means there are a lot of talented people out there who are just not contributing. And so economics would just be a richer place if sort of everybody had a sort of fair shot of getting in.
And then finally, there is definitely a perspective. So people all bring their own experiences into their work, both in terms of how they think about it and sort of what areas they look at. One of the examples I think about sometimes is economics always starts with sort of your base case is a super rational consumer who optimizes every decision and makes sure they're always maximizing their utility. Well, if you're a working mom with kids, you kind of laugh at that. Right? Because that's sort of impossible to do in general. You might choose a few things where you really put the time in, but basically you are making decisions as quickly as you can. You're not thinking about everything. And that just means that you're just much more open to saying, “You know what? There's a role for government and there's a role for certain protections, consumer protections so the consumer doesn't have to do all the work themselves.” And behavioral economics just seems so much more appealing. So I think when people bring in their own perspectives, they sort of start analyzing the same questions slightly differently.
And then of course, you know, there's so much that you can do about what's going on with women's labor force participation or childcare costs and how much does childcare effect one’s decision to work. And there's just millions of kind of topics that might not be examined if you didn't have people who lived those experiences thinking about them.
Hasenstab: What else do you think we could do to encourage more women into the field of economics, to reach girls at a younger age, even in high school?
Sheiner: Yeah. So, I’ve been thinking about that. I have three daughters and two of them took economics in high school. So, I’m somewhat familiar with the AP Economics curriculum. Actually, one of them took Micro and one of them took Macro. So… And I’m not really sure that the curriculum presents the economies in the best light if you want to attract females to it. What we talked about how, you know, the girls need to see that economics is a way of addressing social problems. I’m not sure it’s really presented that way. So, maybe some attention ought to be given to whether or not there’s a better way to introduce high school students to economics.
But, you know, for parents who want to encourage their kids, one thing that I do think is actually really helpful is to encourage them to do high school debate, which my kids also did. So, I think, in high school debate kids are really encouraged to think about big broad policy issues, and to learn to think critically about them and to use evidence to buttress their perspective. I think they learn a lot more about what an economist actually does and all of the different questions that they address from high school debate than from the AP Econ. And actually, a lot of well-known economists were high school debaters. You know, unfortunately, high school debate is also a very male activity and subject to many of the same inclusivity challenges that economics faces. So, I think that working on that just gender disparity as well would be helpful. But, as a parent, I would definitely encourage all my kids to do debate because I think it’s a great way of learning to think about the world’s problems.
Hasenstab: Well, that’s a great suggestion to encourage high school students to pursue debate to learn more about the field of economics.
Sheiner: Yeah. I think it really is quite helpful.
Hasenstab: Louise, thank you so much for your time today.
Sheiner: Oh, thank you very, very much. This has been great. Really appreciate it.
Hasenstab: To hear more Women in Economics podcasts visit stlouisfed.org/womeninecon. That’s one word. StLouisFed.org/womeninecon. Thanks, Louise.
Sheiner: Thank you very much.