“I loved the psychology of how people interact,” which is why Mary Daly, the research director at the Federal Reserve Bank of San Francisco, was drawn to economics. She shares the story of her journey from high school dropout to a leader in economic research. She credits a counselor, a professor and even former Fed chair Janet Yellen for aiding in her success.
This 18-minute podcast was released March 28, 2018.
Editor's Note: At the time of this recording, Daly was the research director at the Federal Reserve Bank of San Francisco. She was named the president of the San Francisco Fed effective Oct. 1, 2018.
Maria Hasenstab: 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 Mary Daly, research director at the San Francisco Federal Reserve. Hi, Mary.
Mary Daly: Hi, thank you.
Maria Hasenstab: I’d like to talk to you today about your story and how you came to choose economics as a field. Let’s go back to your childhood. When did you first understand what the concept of economics is and how it relates to the classroom or the real world outside the classroom? Do you have any of those early memories?
Mary Daly: Oh my gosh, I have an early memory that might have said I shouldn’t be an economist. But I remember driving in the car with my parents and my siblings. And we’re driving along and my father’s talking about what he did that day as a postal worker. And I’m in the back seat, and I’m the oldest, and I launch myself up front, and I say, “How much do you have to pay to go to work? Because I want to pay to go to work. I want to go to work.” And he said, “Oh, it’s completely backwards. You get paid to go to work.”
But that was my first understanding, because work seemed so exciting, I thought you would have to pay to do it, just like you have to pay for sports or something of that sort. So that was my first understanding that the economy ran differently than maybe I had imagined. And I became interested in it right then.
Maria Hasenstab: Tell me a little bit, as you got older, tell me about your high school experience.
Mary Daly: Well, actually I dropped out of high school. I was—worked in—I lived in Ballwin, Missouri, and my family—my father was a postal worker. My mom stayed at home. And we were not poor, but we weren’t very wealthy, either. And at some point my family just, sort of, imploded. And my siblings went to live with my grandparents and I went to live with friends. And I dropped out of high school.
And then I worked at donut shops and I worked at Target to try to cobble together a full-time salary, and eventually, and only eventually, got a GED and then went on to college.
Maria Hasenstab: From dropout to obtaining your GED, that’s already a success story by many measures. Can you tell me how then that evolved into going to college?
Mary Daly: That’s a really good question. I wouldn’t have been able to do it without a mentor of mine, Betsy. And it’s interesting. After I dropped out of school, I reached back to one of the guidance counselors because I was feeling a little bit underwater, not just financially, but just, I’m 15 and I’m on my own, living with friends. And I don’t really know what to do next. And she put me in touch with Betsy, who was also working in the schools.
And I started talking to Betsy, and Betsy mentored me. And she said, “Mary, you should get a GED.” And then she said, when I got the GED, and I thought I’d apply for a bus driver job so I’d get union wages and health benefits, and she said, “I think you could apply for college. You could start at the community college, or you could maybe do a semester at 'UMSL,' University of Missouri-St. Louis.”
So I applied. I got in. I couldn’t believe it. And then I couldn’t afford it. So she paid for my first semester, $216 for a first semester, full term. And I did OK. And then she said, “Go ahead, maybe try a four-year degree.” And so that’s what I did.
Maria Hasenstab: Wow. That was great that you had that support system.
Mary Daly: It was essential. I don’t know—I mean, there’s no way that I would have been able to find my way without some help. And it just reminds me of the importance of mentors at any point in your life, but especially when you’re young, having someone say, “I see something in you that you don’t see in yourself. And I see opportunities for you that you don’t even imagine.” And then I took them, and here I am.
Maria Hasenstab: So when did you learn that you were interested in economics?
Mary Daly: I’m a roundabout person, apparently, a crooked path kind of person. So I started majoring in psychology, because that’s something that I knew Betsy had. She was a Ph.D. in psychology, and I—that was my role model, so I said, “I’ll be a Ph.D. in, I mean, I’ll be a psychology major.” So I majored in psychology and I’m doing research, and I get to the practicum where we’re going to do roleplay. I’m in my first year. We’re going to do roleplaying.
And I remember I’m the counselor and my teacher is the person who’s coming for counseling. And we went through this roleplay where he said, “I’m having trouble with my girlfriend.” And I said, “OK, well let’s—here’s a plan.” And then he went away, came back, knock-knock, next week. And I said, “How’d the plan go?” And he said, “I didn’t do it.” And I remember not really leaping out of my chair, but looking at him and saying, “You didn’t do the plan?” And he said, “Maybe psychology is not for you.”
And so I thought that was probably a good call. And I decided that I would do psychology at large, which is economics. So economics is the study of humans. It’s mistakenly often thought of as a study of data and finance and math, but it’s really the study of people. And that study of people, it, in the aggregate, is what I loved. I loved the psychology of how people interact, and economics is about that. So I fell in love with economics. I went and took a course. The instructor was so inspiring I stayed with it. And that’s what I’ve been doing my whole career.
Maria Hasenstab: You just mentioned an inspiring instructor. Can you tell me a little bit more about that experience?
Mary Daly: Yes. Gene Wagner. So Gene Wagner had that sense of economic, social science, policy, everything all rolled into one. And I remember going into his class. He was a very tall man. I’m not as tall. And then he had a booming voice. It was a class of about 200 people. But he had a booming voice and he would talk about economics. And he would talk about how important it was, and he would link it back to things that I had seen in my everyday life, like what happens when people lose their jobs. If they’re living very close to the bone, he would say, which is very close to the edge, then a job loss means a lot more than if they have some resources and a safety net. And that’s how he started talking about the safety net.
He also inspired me in this way. He was a voraciously curious person and had a voracious appetite for information. And I’m there. I’m young. I’m looking up and I’m thinking, oh, wow, how can I be him? And I remember him sitting at the front of the room one day, and he said, “My wife,” he was talking about his wife then. He said, “My wife is so curious she reads the back of cereal boxes.” And I went home and started reading the back of cereal boxes and everything else I could read. And that inspiration, just to be curious, to fill your mind with lots of ideas and things, and to pursue what you love, and to be passionate about what you do, that all got wrapped into one. And he’s also an economist, so he became someone who has mentored me my whole life.
Mary Hasenstab: You’ve mentioned now two mentors. Are there any other mentors you’d want to talk about?
Maria Daly: Well, I’m a big believer in, “it takes a village” for any one of us to be really successful. So I’ve tried to reach out and find mentors in my life, in my whole career. I was a little more daunted finding them when I was older, because I thought—I’d kind of convinced myself I needed to know everything, and that’s just not true. And so I kept going and I would ask—and another important mentor in my life was Janet Yellen, or is Janet Yellen. She is still a mentor of mine.
And she came to work at the Federal Reserve Bank of San Francisco as president when I was in the research department. My career was going well, and I was very happy and successful. But she made my career kind of explode by just giving me opportunities as a labor economist to participate on things that were macroeconomic. And that training that I had, just by interacting with her, answering questions, thinking about issues the way she did, I learned to do macroeconomics and labor economics simultaneously, and she’s also a big inspiration because she just has, again, I think I’m attracted to this, this voracious appetite for information with a commitment to do well by people.
Mary Hasenstab: You obviously have an important position at the San Francisco Fed. And you’ve just touched upon this, but what are your primary areas of expertise or interest?
Mary Daly: Well, I have a wide ranging set of interests. I am a labor economist by training, but for much of my career I’ve worked on the social safety net and how robust and sturdy is the social safety net. Should we modernize the social safety net? Thinking about Social Security, disability benefits, the welfare system, those types of things.
I’ve also done a lot of work on economic inequality and economic mobility, and how people can get ahead and move up the ladder. There’s this idea out there that we have an American dream that anybody who puts hard work in can climb an economic ladder, and that their children can do better than they have done. And I really want to investigate and work in the area of, is that true? And when it breaks down or the ladder has missing rungs, what’s the cause of that and how do we repair it?
And then, of course, because I work at the Fed, I’m just fundamentally interested in how monetary policy interacts with people’s lives, and importantly, I think about myself as a macro labor economist who thinks about the macroeconomy and monetary policy and how we achieve the dual mandate, which is low and stable prices and full employment.
Maria Hasenstab: And do you feel that being a woman has affected your expertise or your areas of interest in economics?
Mary Daly: You know, I’ve thought a lot about that, and I don’t tether my interest in these topics to being a woman as much as I do to being—growing up in a lower-middle class family and having the background and experiences I’ve had. But, upon reflection, I’ve also learned that I’m much more likely than some of my colleagues who I co-author with, who are not female, to say, “Well, what does that feel like for the person?” Or what does that mean for not just the average, but for the distribution of outcomes?
And it’s not that they’re not interested, it’s just that that’s my go-to, and it’s less their go-to. So whether I attribute this to gender or something else, I do notice a difference that’s in me that’s probably a combination of how I grew up, where I grew up, and my gender. And being able to be comfortable, having that difference there, and actually use it as a benefit in my research, as opposed to something that I have to overcome, that’s been a challenge I’ve worked at early in my career, and I embrace fully now is that our differences make us stronger as researchers, and so leveraging those differences to see the world in a way that someone else might not see it, that’s, I think, the strength.
Maria Hasenstab: And going back to earlier in your career, like you just mentioned, and even back to college, did you feel as a minority, being a woman?
Mary Daly: Well, so I’m 4’ 11 1/2” on a very strong day. I’m openly gay. I’m female. And I come from a lower SES (socioeconomic status). So I don’t think I’ve ever felt like I was in the majority. And being female was just one of the things that I didn’t feel in the majority for. But I think having all these differences made me just reticent a little bit more than I would have been if I had been able to feel more in the group.
You know, that reticence has taught me something that I think is really valuable, which is, most people I meet, and I work in a completely male dominated field, most people I meet don’t have poor intent. They just have missing information. So once they get to know me, and they see that Mary is as capable, even though that’s not their prior because they don’t have any experience—not because they’re against me, just they don’t have any experience with me, then suddenly all those preconceptions, they fade away. I’ve rarely encountered—and I’ve been fortunate. This is not the experience of every woman, but I’ve been fortunate in my life, in my experience in the profession, to never be told no because I’m a woman, but I’ve had to prove myself because I’m a woman. But then once I have proven myself, and that takes a little bit of work, I feel that the debates open up for me and that people take me seriously.
Maria Hasenstab: Can you think of any specific instances where you felt like you had to prove yourself as a woman in this field?
Mary Daly: Definitely. So let me go back really early in my career. And again, it’s hard to say if it’s just being female because, at this point, I was also young. So I’m on a panel who was assembled to think about privatizing Social Security. And my work on Social Security and the social safety net, I was on the panel. And I was one of two women on this panel, and the other woman was much more senior than I was.
But I got what I felt like was a lot of hazing would be too strong, but doubt. I would say something and people would doubt me. I would say something and they’d ask for more proof, whereas other individuals would say something and they’d say, “Oh, OK. That’s a good point.” And so I just felt that need to prove myself. And, you know, when I reflect back on it, I didn’t take issue with it so much as much as I just noticed it and said, “If that’s what it takes, that’s what I’m going to do.” And, again, it’s hard to know if that was because I was young or because I was female, but it definitely happened.
Maria Hasenstab: Does your gender shape your current work?
Mary Daly: Well, it shapes what I am focusing on in this important way, not so much the research I do, although I think, you know, recent research I’m working on is on the black/white wage gap. So I believe that my experience is in seeing differences across types of people when these individuals have no control over it, whether it’s age or gender or race. That has driven me to look for these gaps, to identify them and understand why they’re there, and then try to find remedies to equalize. So I think that is very important, an influence on my work.
The other way where my gender is very much influencing my work is I feel like I’ve been fortunate. I’m now in a position of authority. The Bank employs lots of people. I manage those people. And I also have a reputation in the profession. So I feel it is my responsibility to try to pay that forward a little bit by helping younger women and other minorities get into the profession, be part of the profession, and have a sense of inclusion in the profession long before I think several of us have had it.
So it’s one thing to be at the table, but we need to want to hear the voices of those individuals, and that’s where I’m committed is. I feel like that’s my responsibility along with other women and my cohort, to reach back and say, “You earned the place at the table, but you also earned to be able to speak.”
Maria Hasenstab: Why is it important to have women and other minorities and other underrepresented groups in the field?
Mary Daly: Well, ultimately, economics, as I said, is the study of people. And it is the single profession that is most influential in policymaking. It’s a major input to how we make policy, not only at the federal and state and local government levels, but also in companies. So now think about the people we’re serving. We’re all—in the federal government, or at the Fed, we are in public policy. So we need to represent the people we serve.
Now why is that so important? Well, policy is endogenous, or it reflects the people who make it. So if you have only one type of people around the table, making the policy, you’re going to miss a lot of the problems that other people would see. And you’re certainly going to miss the unique solutions that they would be able to offer. So I think it is a necessity, it’s not a luxury, it’s a necessity that we have the diverse groups that we have in the population represented around the table of policymakers and around the table of the people who influence policymakers, and that would be economics.
Maria Hasenstab: Mary, could you give me some specific examples of how you mentor women in the field?
Mary Daly: Yeah, that’s a great question. I try to do it in a variety of ways, large and small. Let’s go with the small ways, one person at a time. I want to make sure that I’m working with my female RAs, or working with female interns who come into the bank, or working with anyone who’s female—or other minorities in the bank, to try to do—just do one-on-one coaching with them. Sometimes that coaching is about confidence. Sometimes it’s about saying, “Hey, I noticed you’re interested in that. Would you like to work on a project with me? A little essay or a data project so that you can get some experience?”
And that grows and grows into us having local universities come in and get to meet our female RAs and get to meet our female economists, and see themselves in these roles, and also going to universities. And when I go to give a seminar, making sure that I meet with female students. Meet with undergraduates and graduates alike, and just answer questions.
The part of mentoring that was the most helpful for me was just having someone I could trust—that I could ask questions of, not feel stupid, not feel like I didn’t belong but I could get answers that would then help me be better in my schooling or be better in my networking or whatever it was. So I think, I’m just trying to create safe opportunities for people where they can ask these questions.
A very successful thing that we’ve been doing is, we’ve also been bringing in people from local universities and just having the day where they get to have different presenters come, and then just have receptions where we mingle and we think about, and you just get to ask casual questions. That is mentoring in and of itself. And sometimes I get e-mails back from these people, and I can do virtual mentoring that way. But it really is about the direct contact, and direct contact can be one person at a time, or it can be whole groups at a time.
I just want to call out the St. Louis Fed for doing this, is that organizing groups such as Women in Economics where universities, colleges, can come and have a day of workshop to learn about being an economist, to learn what the field is like, but then to also interact with female economists, I think that’s really amazing, which is why I got on a plane and flew from San Francisco to St. Louis to participate.
And I applaud the leadership of the St. Louis Fed, but I think just getting out there and doing these types of things, showing up, showing up is 90 percent of it a lot of times. And showing up for our young women and saying, “We’ve done it, so you can do it.” That’s mentoring.
Maria Hasenstab: Mary, this has been so interesting to hear your story and learn more about you. Is there anything else you’d like to tell me about being a woman in the field of economics, or anything else you’d like to discuss today?
Mary Daly: Only this, because I think the news and the media and the attention that the lack of women in economics is getting, is a double-edged sword. In one way it can be inspiring. Wow, we got to get more women in there. But in the other way it can be a little daunting, especially if you’re young woman wondering if you should come into economics.
And so I do have something that I think is important to say. It is an amazing field. I have been passionate about this since the day I learned it. It’s a toolkit and a way to think about the world that allows me to contribute in ways I never thought possible. So that excitement I have for my profession, I want everybody to be part of this profession.
But the other reason for young women to think about it is, we need you. We absolutely need you. For economics to advance, for us to be relevant in the future, for us to take in all the problems that need to be solved and find solutions for them, we need everybody at the table, all the groups. It’s a call to action for young women: Please join us.
Maria Hasenstab: Absolutely. Thank you so much, Mary.
Mary Daly: Thank you.
Maria Hasenstab: To hear more Women in Economics podcasts, visit stlouisfed.org/womeninecon, that’s one word, stlouisfed.org/womeninecon.