Women in Economics: Stephanie Aaronson

Mary Clare Peate: 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 Mary Clare Peate, your host for this episode. Today, we’re speaking with Stephanie Aaronson, the senior associate director of the Division of Research and Statistics at the Federal Reserve Board of Governors. She has also served as the vice president and director of the Economic Studies program at the Brookings Institution. Stephanie earned her bachelor’s degree and a Ph.D. in Economics at Columbia University. Stephanie, thank you so much for joining us.

Stephanie Aaronson: Thanks so much for having me today.

Peate: Stephanie, as I just listed, you are the senior associate director in the Division of Research and Statistics at the Federal Reserve Board of Governors. In total, you’ve worked more than two decades at the Board of Governors. Tell us about your work.

Aaronson: So, I’m in part of the Division of Research and Statistics. It’s focused on producing the forecast of the U.S. economy for the Federal Open Market Committee, and when I started, I was a labor economist who was forecasting, you know, what the path of the unemployment rate was going to be, productivity, employment growth. And as I’ve, sort of, moved up, my, kind of, aperture on the economy has really widened. So, I worked on the investing forecast. I was the person who coordinated the forecast and made sure that C plus I plus G plus net exports all added up, and, you know, now in sort of a more senior management position, I’m responsible for overseeing the forecast, making sure that the story we’re telling about the U.S. economy makes sense, that all the pieces fit together. I also work with economists who are thinking about what if our forecast is wrong, what are other things that could happen in the U.S. economy, sort of some alternative scenarios. And more generally, I’m there to support the division director in achieving her strategic goals for the division, in supporting the staff to make sure that they are achieving their professional development goals, and, you know, advancing the mission of the Board.

Peate: Great. And before recently returning to your role at the Federal Reserve, you were at Brookings. What were you doing there, and can you share some of the similarities and differences between that position and your current role at the Fed?

Aaronson: In some ways, you know, the positions are very similar. I was the director of a group of high-performing economists and operations staff that were trying to do research that would improve policymaking, mostly at the federal level, fiscal policy and monetary policy, but almost some state and local policy as well. And in that role, I set the strategic plan for the program. I was very involved in making sure that our staff was engage, and also, since we were a nonprofit, I did a lot of fundraising to help support the program and make sure that the economists had the resources that they needed to be able to do their work. One difference from my job is that, now, is that, when I was at Brookings, I was really, in a sense, a public expert. I was doing my research, and then, I was also speaking with the media about what was going on in the labor market and the U.S. economy. And at the Board, I’m still, sort of, teaching people about the economy, trying to help understand, but there my audience is really the staff and the governors and the FOMC and not really having much of a public voice.

Peate: Great. Now, let’s back up and discuss your education. How did you decide to pursue economics?

Aaronson: So, I had a pretty winding path to becoming an economist. I was very interested in economic issues and economic policy, and I had a great principles of economics class with a wonderful teacher. But then, when I went into intermediate macro, the teacher was talking about C plus I plus G, and I thought it was just very abstract for me. I was interested in economic policy because I wanted to make economic policy better for people. I wanted to help people achieve their financial security and their goals, and I was interested in the question of inequality, which was rising a lot when I was in undergrad. And this class seemed very far from that. And so, actually, I dropped the class, and I majored in history. But I still was interested in these economic issues, and so, after college, I went and I worked at a think tank in Washington D.C. called the Institute for Women’s Policy Research, which was focused on, you know, as the name suggests, economic issues facing women. I studied things like the wage gap between men and women, how to create a program to provide paid family and medical leave to people, and in that job, I could really see how the tools of economics would be good for studying these economic issues that I really cared a lot about. My boss there was an economist, and I was like, “Oh, maybe I can do this.” And so, I took classes to, you know, be able to go to grad school. I took math classes, some economic classes, and that’s really how I ended up studying economics.

Peate: And, you’re now very passionate about macroeconomics. Can you tell us how you got from economics to macroeconomics and why you might encourage other women to consider studying macro?

Aaronson: Yeah. That also was not such a direct path, and I feel like there’s a lesson in that for people, you know, thinking about their own careers. I think it’s hard to know in the future what you’re going to be doing, and you just have to be flexible and open and follow where the path leads. So, when I went back to graduate school, I really studied what I called applied micro. My fields were labor and public finance, and I was more on the micro side of those. But when I was on the job market, I was really looking for policy-oriented jobs. That’s really why I had gone to grad school, and although I did apply for a few academic jobs, my heart was really set on doing something more policy oriented. And I, you know, got this job offer from the Federal Reserve Board, and I tried to think of how can I do the work that I really care about and will that fit with the mission of the board.

And there was one of the economists I met there. His work was very similar to mine. He was interested in studying workers who were displaced due to plant closures and more kind of, applied micro like I was doing, and I reached out to him. And I said, “You know, given your work and the style of work you’re doing, the issues you seem to care about, how do you feel like that fits in at the board?” And he said to me that the workers that he studied, the ones he cared about were the people who were the most harmed when the economy went into a recession. And so, if there was something he could do to prevent a recession or to lessen its depth through the, his contributions to the forecast, that then he was helping this population that he cared about. And that made a huge impact on me, and I said, “You know, that, that sounds good. I also want to do that.” So, I decided to try it out.

And yeah, as you can tell from how long I’ve spent now at the board, it turned out to be a really good, a really good fit, and I think part of it is that when I think back to how I was taught macro as an undergrad or even in grad school, I think often the people behind the models was ignored. But the truth is that macroeconomic outcomes have a huge impact on people’s wellbeing, and that’s what’s really motivated me to this day, to keep up with that work.

Peate: And why would you encourage other women to study macro?

Aaronson: The truth is that women are really underrepresented in macro. They’re underrepresented in the economics profession as a whole, as I think has been widely known, but they’re particularly underrepresented in macro. Most women who study economics, they tend to study things like labor or health or education, but even finance has a higher share of women in it than macro does. And I’m not really sure why that it is, but having diverse voices on policy issues is very important. We need to make sure that a broad array of perspectives are heard and especially at an institution like in the Federal Reserve system where we’re working on policy questions that have such a broad impact, but also a lot of fiscal policy questions. Having this diverse set of voices is very important. It can really change our perspectives on what we’re seeing in the economy. And so, I really hope that more women will enter the field so we can hear their voices, and also, it’s a really fun job. So, I think people should check it out for that reason, purely selfish reasons as well.

Peate: And, I should thank you for being a part of our recent Women in Economics Symposium where you presented to hundreds of students and professors here at the St. Louis Fed and those watching virtually. This symposium and this podcast series aim to encourage more women and underrepresented minorities to consider economics for their careers. The Federal Reserve itself has been criticized for a lack of diversity. And so, I want to ask you: What are you doing and what is the Federal Reserve doing to represent diverse voices?

Aaronson: So, when I think of this issue around diversity in the profession and how to improve it, I, kind of, have two buckets that I think about. One is how can institutions like the Federal Reserve – also when I was at Brookings, this was a big concern of ours – how can we improve the diversity of our own staffs, the economists we hire, the research assistants we hire? And then, the other question is how can we improve the pipeline of people who are thinking about entering into graduate school, sort of the future economists, and how can we make sure that, you know, the people in the pipeline, represent a more diverse group of people than are currently in the profession?

So, at the Board, we’re really trying to tackle both things. I would say over the last 10 years, we’ve overhauled the way we do our hiring to really make sure that we are seeing a very diverse set of candidates and that we don’t have biases that are preventing us from interviewing them. So, for instance, people involved in our recruiting undergo, sort of, an anti-bias training. We take a special look at the pool of applicants to make sure that we haven’t inadvertently weeded out candidates who come from non‑traditional backgrounds or who might be more diverse. And we keep careful track of what we’re doing along the way to make sure that there’s nothing about our own process that is reducing the chances we could hire a good candidate.

We’re also very involved in trying to improve the pipeline into economics. So, for instance, the Board works with the AEA Summer Program. We’ve sponsored events for them. We’ve been doing a course on, sort of, use of data with Howard University and the AEA Summer Program to try to make sure that people coming out of the program have the skills they need to become an RA or go to graduate school. We’ve become involved in the Sadie Collection, also an organization that aimed at increasing the number of Black women in the economics profession. We’ve actually hired a person whose job it is to make connections with schools where we’re more likely to meet diverse candidates.

So, I think along all these dimensions, the Board is trying to be active. Personally, I’ve been involved in a lot of those efforts, but I’m also actually on the Committee for the Status of Women in the Economics Profession, which is a committee of the American Economics Association, and I’m happy to say that I’m the first, what we’re calling, the D.C. representative. So, this is a new post that the former Chair of CSWEP, Judy Chevalier, created, which is aimed at supporting women who are in non-academic jobs within the profession. So, this is aimed at people working in government jobs, people working in the private sector, in non-profits and think tanks, and, you know, I think that a lot of the work that CSWEP has done historically has been aimed at women in academic jobs. So, it’s been aimed at how can you increase your publications, what should you do to try to get tenure, and women in non-academic jobs just face a different set of incentives. Many of them also still are doing research, but they also have to think about, at some point, do I want to go into management and, what’s the balance of work that I should be doing. And so, we run some mentoring events and networking events. We sponsor panels at the APAM conference so that junior women have a chance to present their work. For instance, a few years ago, we did a set of panels – this was when I was at Brookings, so it was co-sponsored between CSWEP and Brookings – that, sort of, showcased to the work of the women in the non-academic jobs to help people understand what are the alternative things you can do with an economics degree.

Peate: That’s great. A lot of the women interviewed in this series have shared powerful stories about mentors who have made a difference in their education or their careers. Do you have any mentors or role models who really impacted your career?

Aaronson: As I mentioned, when I first graduated from college and I worked at the Institute for Women’s Policy Research, the director of the institute at the time, Heidi Hartmann, was a real role model and mentor to me. I mean, she was probably the first woman economist I ever met, and I could see how passionately she cared about the work that the institute was doing. She actually founded the institute, and when I was there, it was only about five years old when I started. And, you know, she was someone who was really driven by her care for working people and working women, in particular, and I found that very inspiring. And seeing the path she had taken made me think that this was a great way for me to accomplish what I wanted to do as well. I cared about similar issues.

Another person who really helped me was my advisor, Steve Cameron in graduate school. As I mentioned, I had, sort of, a non‑traditional path into economics, and when I got to graduate school, I definitely had a weaker background than many other people in the program. But Steve always had faith in me. He was like, “You are plenty smart enough to be able to do this. You know a lot of things other people don’t know,” because I had come from already having done policy-oriented research. And I think he just gave me that faith that I could get through the program. You know, economics grad school is, sort of, notoriously known for being difficult, especially in the first few years, and I think his support really made me feel like I could, I could do it.

Since then, the thing that’s really benefited me a lot is just having role models at the board and elsewhere who I could really see myself. For me, for instance, one of the big transitions in my life was having kids, and being able to see how some of the people I worked with balanced their work and family. I had, you know, a colleague who cut back her hours for a few years to take care of her kids. I had, yeah, another colleague who, remember my boss, at one point used to leave work to go coach his kid’s basketball team. And having those types of role models, I think, encouraged me to think about how I could have a healthy mix of work and family, which was really important to me.

You know, economics is known for being, sort of, a tough environment sometimes, and every so often, when I’d be in a meeting and it would be particularly argumentative, you know, sometimes people would be like, “Don’t worry about it. You are doing fine.” Just those little words of encouragement over the years have meant a lot to me.

Peate: And are there any specific challenges you’ve faced in your education and your career, and how did you overcome them?

Aaronson: I think I mentioned one, which was that I did come in with less of a background in economics than a lot of my fellow grad students. Some of my fellow grad students already had master’s degrees, and, you know, I hadn’t even taken IO or labor or an economic history class when I started. So, I do think that, early on I was playing a lot of catch-up, and I think it also made me, did make me feel a little insecure about my ability to do the work. First of all, I had support from a lot of people who said I could do it. I really had a goal in mind because I hadn’t just gone straight from college to graduate school. I had spent some time in the workforce, and I understood why I was in the graduate school. And I think having that sense of purpose really saw me through what were definitely some tough times. Since then, you know, I’ve made a big effort to try to catch up. You know, that’s, it’s just given me, sort of, an incentive to fill in where I thought I saw the gaps, and that’s actually been a lot of fun.

Peate: Great. And is there anything else you’d like to discuss about women in economics?

Aaronson: I think there has been a lot of talk in recent years about the lack of diversity in the economics profession and also about the culture of economics and the economics profession, whether it really is a good place for people to work, and I have to say I have been very lucky in my career. I definitely have faced times, as I’ve, mentioned, where seminars can and meetings can be really tough. People really can, you know, go after you, and I think, you know, that is part of the culture. But I will say that I think that it is changing. So, there are a lot of organizations now that – this is true of the Fed and also at Brookings – that for instance, we’re trying to change the seminar culture to make them less argumentative and more constructive. We still want to give the feedback. We want to make the work the best it can be, but understanding that we can do that in a way that is less belligerent. I think that there’s more of an effort to call out bad behavior in the profession and to not be as tolerant of it. I think we have a long way to go on that, but I do think that there are a lot of people making a sincere effort to change that.

And the rewards of studying economics are high. As an economist, the, there is just an endless array of fascinating topics you can study, and that’s true, whether you’re doing macro or micro, theory or empirical work. And because the economy is always changing, there’s always something new to be thinking about. I think also the tools of economics are really useful, whether you end up being an economist in academia or elsewhere or not. So, I have friends and colleagues who are in academia. They’re at places like the Federal Reserve and the Treasury, at think tanks, but also working for corporations. They’re working for banks. They’re doing data work in tech companies now and the tools of economics, the analytic framework and the data skills you learn are really valuable. And so, I hope that people don’t get too discouraged by, kind of, what they read in the news about economics. I’m not trying to downplay it, but there are a lot of upsides to being an economist as well. And the more people, diverse people who come into the profession and fight for it, the better it’s going to be.

Peate: Thank you so much for sharing your story with us today.

Aaronson: It’s been my pleasure.

Mary Clare Peate: 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, or wherever you like to listen to podcasts.