Women in Economics: Paulina Restrepo-Echavarría

Mary Suiter: I’m Mary Suiter, and you’re listening to Women in Economics, a podcast series from the St. Louis Fed’s Timely Topics audio channel. I’m here today with Paulina Restrepo-Echavarría. She’s an economist in the research division here at the Federal Reserve Bank of St. Louis. Thanks so much for being with us today, Paulina.

Paulina Restrepo-Echavarría: No, thank you for having me.

Suiter: I guess we’ll start out with how did you choose economics as your field of study?

Restrepo-Echavarría: So, I think I became interested in economics since high school. So, I studied in Colombia, my home country, and I was at a high school where I did the International Baccalaureate. And, in the International Baccalaureate, you have the option to choose among different subjects of study, and since I was in eighth grade, I started taking economics. And, I thought it was really fun, interesting. It dealt with your day-to-day life. And then, when I got to my senior year, I had a great professor teaching me economics in high school, and I think that it was him who actually got me interested in studying economics.

Suiter: So, when you say it deals with your day-to-day life, could you just a little bit more about that because I don’t think the average listener may think that economics has much to do with their everyday life?

Restrepo-Echavarría: Economics is everything, basically, right? It is when you got the supermarket and you see that—if you go to the supermarket next to your house, one item costs a certain price, but if you go to a supermarket that is far away from your house, it’s going to cost a different price. So, there’s price discrimination.

How you find a partner actually to get married? That’s also a field of study in economics because we have models that tell us what is the best way to choose someone, and that can be applied to either how to find a partner or to get married or how to find that particular good that you’re looking for or how to find a job, for that matter.

So, everything is about economics. You can think about economics everywhere at any time.

Suiter: And that’s great, and I think we need more young women to recognize that idea. So, you took economics from eighth grade every year through your senior year? And then, that final professor, or instructor, really had a great impact on you. What about that instructor was so impactful?

Restrepo-Echavarría: His passion. He was absolutely passionate about economics. And he was, he was a philosopher as well, so he had a lot of depth to the way he taught economics. So, it wasn’t just about, you know, learn this formula, plug this graph, but it was a lot about what it meant for life. And, I guess that I was interested in that because, back where I’m from, there’s this, given that it’s a developing country, lower income, there’s this belief that you can’t really study anything you really want.

So, for example, I really wanted to study astronomy, but back in Colombia, if you study astronomy, you can’t really have a future for yourself, basically, because there’s nothing that you can work on. There are no jobs for astronomers, same for philosophy, and I was very interested in those two particular fields. So, the way he taught economics made me think that given, like the normal things that you could study to have a good life there, which would be, like, business, economics, engineering, medicine, economics would have a lot of philosophy and things that kind of catch my attention.

Suiter: So, you could make a career out of this, and it was interesting enough to make a career?

Restrepo-Echavarría: Yes.

Suiter: Okay. So, I would think he was really your first mentor. Have you had other mentors in your career?

Restrepo-Echavarría: Yes. I’ve had several. So, I guess he was my first mentor. My second mentor was at the Central Bank. So, when I did my undergrad in economics, I graduated and I started working for the Central Bank of Colombia. When I was working there, the person who hired me was one of my professors at the university, and he used to work, well still works, for the Central Bank of Colombia. His name is Franz Hamann, and he’s now one of my co-authors. So, he was kind of my second mentor. He started teaching me all the tools that you need. He had just recently finished his Ph.D., so he kind of showed me what you would learn in a Ph.D. in economics and so on. And then, obviously, when I did my Ph.D. at UCLA, my advisor Lee Ohanian is a huge mentor for me, and Christian Helwig, another professor who is now at Toulouse. He was also very important. He was very encouraging during my Ph.D. I would spend a lot of time talking to him and listening to his advice. That was very good.

Suiter: You left the Central Bank of Colombia to pursue your Ph.D. at UCLA? What did you end up, your area of emphasis or your dissertation, what did you end up studying?

Restrepo-Echavarría: So, I have two areas of study, actually. So, I do international macro, and I do search and matching models. In international macro, I study direction of capital flows, sovereign default, the effects of labor markets on international capital flows. And on search and matching, I study marriage markets and labor markets.

Suiter: Fascinating. Has your experience in economics been shaped at all by your gender?

Restrepo-Echavarría: So, I think my fields of study have not been shaped at all by my gender, but I guess my day-to-day life in the field, yes.

There are very few women, very, very few women, especially in the fields that I study, so if you think about empirical micro and so on, there are many more women. But, in macro, especially in what I do in international macro and search and matching, there are very, very few women. So, you live in a world where it’s basically all males. Always when you go to a conference, it’s maybe three women, four women at most.

Suiter: Okay. And as we’re encouraging young women to listen to these podcasts, but also to become economists, what would you say to those young women to encourage them to choose fields in macro as areas of study, as opposed to the microeconomics?

Restrepo-Echavarría: I think that it’s important to have more women in macro because, in macro, what we’re trying to do is we’re trying to understand the economy in a better way such that we have better policies, better public policies. And, I think that the view of males and females when it comes to policies, which ones are the relevant ones, how to think about them, is very different. I think that women naturally have a different perspective of life because they have to do all the childbearing. They have to bear higher costs when it comes to raising a family, if they want to, and so, they have a different perspective on life. And, I think that we also think differently from males.

So, it would be really useful to have many more women having a say on what public policies should be at a macro level, right, because we have a lot of them doing micro. They’re usually very interested in, OK, what are the effects of motherhood on lifetime income and what is the optimization in terms of how many kids to have and all of these things? But we need women that also affect how many taxes should we pay? Should it be differently if we’re married or not? How should they be affected depending on the, you know, time of life you’re in? Should they be progressive, regressive? What about monetary policy? Because there are no women in macro, I think we’re not having a say in terms of how these policies shape up and they really affect our life very much. So, males are dictating how things go.

Suiter: So, when we work with young women who express an interest in changing public policy, this is an approach to take then in talking with them about macroeconomics and macroeconomic policy and how they can, perhaps, change policies if they study economics, then, become involved?

Restrepo-Echavarría: Yeah. That’s one opportunity, and I think that, in general, even if you think about research that doesn’t necessarily affect policies, I think that we have a different take on everything. The field could really use that creativity from women in order to move the frontier, you know, of knowledge and economics.

Suiter: I think that’s really important for young women to hear, and I hope that they are listening and take your advice. So, you talked about being in a world that is predominantly male in terms of your everyday work. What challenges might you face there that you’ve overcome or you’re still dealing with?

Restrepo-Echavarría: So, you need to really have very thick skin, very. Basically, you need to care about nothing. They can scream at you in your face, and you have to be fine with it. Don’t take it personally because it’s not personal. It’s about work. On the other hand, something that you experience very often and is very sad is that they don’t take you seriously or as seriously as they would take a male. So, to give you an example, you might be at a seminar. You have a point about what they’re saying. You make your point. The speaker, or really a male usually, would be like, “Oh, OK, maybe don’t pay too much attention.” Two minutes later, the guy next to you raises their hand, says pretty much the same thing, and then, it’s completely acknowledged.

So, things are taken, generally, much more serious when they come from a male peer than from a female, and you see that all the time. And, I don’t say it only because it happens to me. I’ve seen it happen to the few female colleagues that I have. It happens a lot. Or, for example, when you’re giving a seminar, and if you have a male co-author and your male co-author is sitting there, a lot of times, the other guys just address the question to the male co-author, not even to you who is presenting. No shame whatsoever. So, those things are very harsh, and I think they’re learning, but it’s not easy.

Suiter: Is there a strategy that you have in those situations to perhaps overcome, or when a colleague directs a question at your male co-author, do you have a strategy for intervening or anything like that?

Restrepo-Echavarría: Yes. So, I usually train my male co-authors to shut up, when someone addresses a question at them and I’m presenting. So, beforehand, I tell them, you know, be careful. You’re not going to answer any question. It’s my question. Second, if they do make it and they insist, which may happen, I just turn to them and I say, “I’m sorry. You can direct the question to me. I’m the one presenting. If you want to talk to him, you can talk to him after the seminar.”

Suiter: Oh, very good. I would think very difficult to do, but very good to do, not only for you but for the males in the audience and your female colleagues to observe how you handle a challenge like that. As a woman recognizing these struggles and you see your female colleagues experiencing the same things, as women come into your field, do you and your colleagues take them under your wing and mentor them in any way to try to help them? Because, I could see women fleeing if they don’t have that support.

Restrepo-Echavarría: Yeah. I don’t think there’s so much of that. So, I think when you look at statistics, it is a case that a lot more women start in the field and they go out of it, and I think they leave because of that. I mean, it’s a harsh environment, very harsh environment. There are a couple of groups in the profession that are meant to mentor women. I don’t think they’re very successful. It’s something that is hard to do, and it’s something that I don’t think it’s about the difference between mentoring men and women differently, in some sense. Right? It’s not like males don’t need mentoring and females do need mentoring. I think that it’s about the attitude. I think that we need to train the males to have an open mind towards women and accept that they can have contributions that are as relevant as the contributions that they can have, and on the other hand, support women.

So, among women, we should support each other. I think there’s very little of that. I think there’s not enough of that. I think about this a lot.

For example, I’m thinking about organizing a conference. I start writing down all the names that come up to my mind in order to invite them, and when I look at them, it’s all males. And, I’m like I need to invite women, and it bothers me that I need to actively think about this and make an effort to invite women because I think it should be just about the area of research that I’m interested in, in terms of the research agenda of someone, no matter if it’s male or female. But, if we want more women in the field, we need to encourage them and make them feel included, and for this, we need to make an effort to say, “OK. I know are a lot of women with interesting research agendas. I need to bring several of them.”

So, it’s a matter of trying to, bring them in, take them into account, and respecting their views. I think that respect is what we’re lacking, I think it’s a matter of being more respectful with everyone. Maybe like that, more women are going to feel more welcome, even if they don’t have a very thick skin, that they can maybe tolerate the environment a little bit more.

So, in a couple of weeks, we’re having a Women in Macroeconomics conference. It’s all women. Actually, the agenda is fantastic. I mean, if you look at the lineup, I mean, stellar, fantastic. But, men don’t know about this conference, and I’m sure if they were to look at the program, they would be, like, “Oh, my God. Right. We have these, you know, 20 women who are, like, all really famous. They all have really good papers, and we kind of never think about this.” So, we’ve done it from the other side. We are trying to do something about this.

Suiter: How would we, or how should we, go about recruiting women? We’re trying in economic education to recruit women into the field. What would be your suggestions?

Restrepo-Echavarría: I think it has to be since girls are very little that we start letting them know that they can do whatever they want to do. I do think that we need to fix the issues of girls thinking that they cannot study something with math, for example. A lot of girls think that they’re going to be much better at softer social sciences, things that are not math-related or engineering or, you know, physics or these kind of things. We need to teach them, since they are very little, that they’re good at math, that they can learn it, that if they want to, they can do it, because we don’t want them to be discouraged at the point of, okay, now I have to compete with males now. They might be better than me at this, so I better don’t do it, don’t even try it. So, I think that self-esteem is something very important with little girls. So, I would start with that, self-esteem in little girls and empowerment. They need to know that they can do it.

And then, when it comes to, let’s say, high school level, when they’re now going to start choosing, I think a lot of girls don’t really know what economics is about. So, a lot of education, in terms of what it really is about, what we do, might be useful because maybe they can change their mind. Maybe they might have this idea of, oh, economics is so boring because people have the idea that economics is finance and, you know, just banks and this kind of stuff. No. As I said, I study search and matching, how to get your best match when you’re looking for a husband or a wife or a partner. That has nothing to do with what people think economics is about, but its’s something very relevant because it affects income inequality, for example. And, we care about income inequality as economists because, you know, if people get married with someone of the same income level all the time, there’s no income redistribution. If we manage to get people married between high incomes and low incomes, then there’s a lot of income redistribution. And, this is economics and this can be fun, and people don’t know that this is economics. So, they need to learn more about what we do in the field to, you know, encourage people to be tempted to at least consider it, women in particular.

Suiter: Well, that certainly supports my perspective that we need to integrate more about economics K-12, and the notion of having young women understand that they can do math at a very young age. I think we’ve talked a little bit about what you currently study, your primary interests. I think the matching piece is going to be of great interest to our audience and the notion that you can use economics to identify the best match for you. So, could you maybe flesh that out a little bit more for us?

Restrepo-Echavarría: Sure. So, I do mostly theory. So, I work on mathematical models of matching, and my most recent paper is about how you choose who to marry, how to find this partner. So, in the literature, there are two types of models. One model is when you are out there in the world and randomly, if you’re a female let’s say, randomly males arrive to your door. And, when a male knocks on your door, you open the door and you see the characteristics or the type, we call it, of a male, and you say, “Uh, I don’t know. I’m willing to wait for the next one, so continue on.” You wait for the next one. When the next one comes, say, “Uh, you know, I’ve been taking quite a while picking one, and this type is OK. I mean, I like him. So, come on in.” It’s random. You didn’t choose anything. The arrivals of the male to your door were random. It depends on statistical distribution.

On the other side of the literature, you have a situation where is, like, the perfect world. You know who’s your Prince Charming, and you actually know exactly where he lives and you can go knock on his door and be like, “Hey. I’m here. I want to marry you.” And, he’s going to open his arms and be like, “I want to marry you too. You’re perfect for me.” That’s kind of absurd. It doesn’t happen, right? First, you kind of have your list of characteristics, you know, that someone should have and that you would like in someone you want to marry. But, you don’t know who they are, and you cannot find them with accuracy.

So, in my model, that’s exactly what I incorporate. I incorporate the fact that you can pay a search cost in order to have a better idea of where this perfect person for you is, but you need to have into account two things. You need to have into account what we call a productive motive, which is is this person my ideal person? Does he check all the boxes in my list? But, let’s imagine, for a moment, that that person who checks all the boxes in my list is Brad Pitt. He’s not going to go out with me. He’s not going to want to. So, there’s a strategic motive. The productive motive is not the only thing that matters. So, you have to take into account the strategic motive and be like, “OK, I have to be real here. Brad Pitt is not going to go out with me. So, I have to give up some of the checks on my boxes and look for someone else where the probability of actually forming a match when I search for him is higher.” So, you want to maximize the probability of actually forming a match but maximize your expected payoff from your match as well.

So, we incorporate that into a mathematical model, and once we incorporate this into the model, the model has several characteristics that are not existing in other models of the literature. And, more specifically, what it allows us to do is that it allows us to actually identify what type of preferences people have for each other. In principle and in literature, there are two types of preferences. We can think that everyone prefers Brad Pitt, and that’s called vertical preferences. Or, we can think that we all prefer someone that is closer to our own type, and that’s horizontal preferences. And, there’s a huge, this caution, or debate, in the literature about whether people have vertical or horizontal preferences, and with our model, because we have these productive and strategic motive embedded into the mathematical characteristics of the model, it allows us to identify from the data whether people have these vertical or horizontal preferences. And, we can check this in terms of different characteristics of a type. So, we can check this in terms of income, age, some unobserved characteristics. So, it allows us to do a lot of interesting things.

Suiter: So, in your own life, did these models influence your choices about marriage and children, how many children to have, and things like that?

Restrepo-Echavarría: No. In my models, I don’t have children. So, that part I don’t take into account. If anything, something that we’ve learned from these models is that people search too little for a match, for the right match. So, I guess I took the wrong road. I got married at 24, and my model says you should have searched much more. But, in general, it’s something that we find for everyone, how people should spend much more time searching for a match than they do to get more match efficiency than we do.

Suiter: And, I’m just curious, do you have children?

Restrepo-Echavarría: I do. I have two children.

Suiter: Do you have daughters?

Restrepo-Echavarría: Yes, I have one.

Suiter: Oh, good. And so, I’m hopeful that you’re encouraging her to recognize her potential in math and her abilities to do math.

Restrepo-Echavarría: Yes. We work hard on that.

Suiter: That’s great. Well, thank you so much for joining me today, Paulina. I really appreciate it. To hear more about women in economics, visit www.stlouisfed.org/womeninecon. That’s one word, stlouisfed.org/womeninecon. Thank you.

Restrepo-Echavarría: Thank you very much.