Thank You president Zimmer Provost Dean's colleagues families in front of
our students and other distinguished guests good morning and of course they
are graduating students congratulations preparing for this speech has been
stressful my exam I even flared up this quarter all these extra stress I soon
realized had much to do with the low expectations I had as to how well an
economist no scratch that an economics working in a business call was going to
be received all of the picketing that has been taking place outside of my
building over the last few months sure did not help raise my low expectations
the broader public does not trust economists a recent poll reveals that
only 25 percent of people trust us that is in contrast with an eighty-two
percent trust level in doctors and 71 percent in historians it is only thanks
it is only thanks to politicians that we escaped the bottom of the list some of
this distrust and sometimes I'll try disliked for economists comes I believe
from a misunderstanding of what economists study and teach for too many
economics is equated to a toolbox of tricks masquerading as a science that
teaches people in firms how to make as much money as possible at whatever cost
to society if you are grading today with an economics degree and if this is what
you think economics is about it's not too late to ask for your money back if
you are graduating with an economics degree or a business degree or really
any degree I sure hope that you understand that misleading and cheating
should never be part of your job description nothing good happens either
to our economy or society when businesses flourish because they cheat
while other businesses struggle because they remain honest and yes you have a
choice you can exert voice be an active agent for cultural change when you see
this culture lacking your place of employment you can also
vote with your feet and exit if the culture is not right and not fixable I
understand this is easy for me to say as I'm not staring at yours of student debt
but trust me there are many good jobs out there that will not conflict with
your moral compass and a little pay cut will be well worth sleeping better at
night whatever you choose voice or exit always remember that you have a choice
but of course it is not what economics is economic studies how people and firms
make choices under constraints these constraints derive from the fact that
the resource that we have as a society are limited there are only that much
natural resources physical capital human capital and time to spread around given
this economists tend to focus most of the attention on efficiency
considerations given the limited resources that we have how do we best
allocate them to maximize people's well-being
we love markets because markets with appropriate safeguards can be truly
transformative in this quest for efficiency more sophisticated
sophisticated critics of economics dislike how disciplined dehumanizes
people we treat people the argument goes as hyper-rational utility utility
maximizing robots and base or derivation of what is and what is not efficient
relying on models that are fundamentally flawed given the unrealistic assumptions
they make about how people make choices this hyper-rational view of human
decision-making does not reflect the field of economics today put more humbly
economists they realize the mistakes and our embrace rather than dismiss the
other social sciences after multiple Nobel Prizes celebrating behavioral
economics it is not apparent even to outsiders that economics is converged to
with a more realistic view of our people make decisions they are lazy they have
self-control problems and they're really not that good at statistics beyond the
transformational imports from cognitive psychology via the work of Richard
Thaler and others sociology in social psychology have also reshaped economics
indeed our understanding of human behavior becomes more complete when we
are willing to accept that people care about what others think of them that the
well-being might be a reflection of not just how much money and leisure they
have but also of how they fare compared to others and how they choice and
circumstances map into their social identity as fourth-generation coal
miners that have been raised to view themselves as the main providers for
their family as african-american boys trying to fit in in the most violent
neighborhoods of Chicago it is true that the economics that we practiced today
with all these imports from psychology and sociology is less disciplined than
it was in the past it is Messier less model centric and
less Theory driven but there's no doubt in my mind that this diminished rigor
has come with a benefit of greater realism and an increased likelihood that
we are getting some of it right it is definitely in this Messier type of
economics that I feel comfortable another criticisms of economics and the
one I want to focus on for the remaining of this speech is related to economists
opposed lack of concern for distributional issues while economists
care about efficiency and value creation in society they do not care about who
benefits from the value that is created and indeed what is most efficient may
sometimes but not always create greater inequalities globalization and trade are
certainly today's leading example of the trade-offs between efficiency and
distribution it is true that some economists have strongly argued against
economy studying distributional effects one of my Nobel prize-winning colleagues
famously said that nothing is as poisonous to sound economics as to focus
on questions of distribution question that might be better left to other
disciplines or political institutions however many economists are in fact very
much concerned with distribution and inequality I'm only one of a large
contingent of scholars in economics department public policy schools and
business calls we've been devoting much of their
careers to measuring inequalities understanding the causes and studying
solutions in a nutshell many economists are minding the gaps
to be clear I do not think it requires extending beyond other economies
preferred focus on efficiency to make the case that inequality should be of
concern to economics this is because inequalities hurt efficiency let me
explain in some of my research I've been measuring gender and racial inequalities
in the labor market some facts are startling enough to be worth repeating
only 25% of college-educated women working full time in 2010 and earnings
above the median of similarly educated men working full-time only 6% at
earnings that put them in the top 20% of the men's distribution in some of the
work I did on racial inequality I used a field experiment to show that
job applicants with african-american sounding names we see 50% fewer
callbacks for interviews than the job applicants with identical resumes but
white sounding names since I completed this work it has been replicated in many
countries around the world with each of these new studies documenting similar
patterns of adverse labor market outcomes for the minority group in that
country North Africans in France indigenous people of Australia
Mongolians and Tibetans in China the list goes on a recent study that mine
hundreds of millions of US tax records show that large income disparities exist
between white and black men even when they are raised in homes with the same
income and the same family structure there are many ways to argue as to why
all these findings are troubling most outside of economics would say this is
just simply unfair a violation of equal rights but it's not just a matter of
fairness and justice and rights it is also a matter of efficiency starting
from the assumption that talent is equally distributed at birth between men
and women and ruling out that as the assumption that women are born with a
comparative advantage in loading the dishwasher changing diapers or driving
kids to soccer games premises I firmly stand by it has to be that as a society
we are leaving money on the table by being only to use one of most extreme
examples 5% of CEO of Fortune 500 companies that a woman
the same logic about the efficient efficiency cost of inequality obviously
also extends to racial inequality my colleagues Eric Harris and Chiang
kai-shek have made this point forcefully in some of these their recent work where
they show that a quarter of the growth that the u.s. is experienced between
1960 and 2010 can be explained by the lowering overtime of the barriers to
entry for women and African Americans into occupations in which they had been
previously underrepresented furthermore and maybe more disturbing to the
aforementioned argument that economics should focus solely on matters of
efficiency and leave distribution questions to others some of the higher
income inequality that may be created by the more efficient policies may also
ultimately hurt efficiency if this income inequality is accompanied by
lower social mobility as the data seems to suggest unequal societies might be
losing out by precluding themselves from tapping into the talent of those who
were born into the lower hand of the income distribution what economics has
given me in my quest to measure gender and racial inequalities is a healthy
dose of skepticism against easy explanations for these inequalities in
particular economists like to start from the prior that there are no free lunch
out there it's a useful prior why would firms that are trying to do the best
they can with limited resources not hire the talented women and minorities whose
talent is apparently undervalued by the market for sure employers should be
jumping on this opportunity and this would naturally reduce the gender and
racial gaps in earnings maybe they are sexist and racist employers out there
but these employers would not survive in a competitive marketplace as they are
paying more for the same talents by favoring white men in their hiring
decisions taking the skepticism to the data it has led me to question a
one-size-fits-all explanation for women's and minorities under performance
in the labor market when it comes to racial inequalities I believe it is
difficult to look at the body of research that is accumulated without
acknowledging the central role of prejudice
but probably more common than explicit racism are the unconscious implicit
biases that induce even the best intention employer to discriminate in
contrast I do not believe that sexism in the workplace is the leading explanation
as to why your moms careers have on average not match that of your dad's
instead I believe that the main explanation is you graduates evidence
that is now accumulated cross-country's show that college-educated women's
careers essentially track that of their husband until the birth of the couple's
first child mothers take a massive earnings hit right after that first
birth and their earnings never recover old school economics help me make sense
of this finding the thinking is that optimizing couples face time constraints
and benefit from having each spouse specialized 1 in the labor market and
you're the one in child care and home production the Messier economics that I
feel comfortable in him else me understand why it is the woman that more
often stack the labor market hit even among couples where the allocation of
labor market talent would ask for the woman to work and the man to stay home
the route is in slow moving gender identity norms transmitted from one
generation to the next norms that are lagging today's
distribution of human capital these are norms about where men belong primarily
in the workplace about which spouse can best provide for the children or about
whether man can truly be a real man if he's all earned by his wife I understand
this view I have converged towards flies in the face of the current focus on
sexual discrimination and worse sexual harassment in the workplace so let me be
very clear I'm in no way saying that sexual discrimination in workplace does
not exist I'm convinced that they are women in
this audience today that have experienced it through my service work
over the last year of my own professional association I've heard too
many stories of women whose career got derailed because of sexist colleagues
they said I doubt that solely eradicating gender discrimination in the
workplace will erase the gender gap in earnings it would be a mistake to direct
all policy for firts beat corporate of public policy to
fixing the work environment when I would argue a key driver of the gender gap
ingenuity is rooted in the home or more precisely the intersection of the home
and the work environments whatever you make of this I have one small request to
all of you give your mom a big hug and
to you the young woman in the audience today you should mind the gap as you
take that crucial step from the platform to the Train you should mind the gap as
you transition out of school and into building successful professional and
personal lives you should realize that these trade-offs between carry and
family still exist for you even though they will undoubtably be
less pronounced in your generation than they were in mine it would be
presumptuous I think to simply assume that you can have it all
carry on family without being thoughtful about the choices you make in particular
in the March market if you want to have it all make sure to check your dates
appetite for diaper duty and willingness to let you shine the brightest artwork
that you want if this is what you want for yourself this holds true even if
your date looks like Ryan Gosling in conclusion I'm afraid that this speech
did not deliver on the forever truths that are staples of commencement speech
I certainly did not share any secret formula on how to design a good life I'm
still looking for that formula for myself but I will squeeze in some final
very clichéd words of wisdom it feels like yesterday that I was sitting in
your chair wide-eyed and ready to build my own professional and family life so
please believe me when I say time really does fly you all have an exciting future
in front of you make the most of every moment congratulations class of 2018
No comments:
Post a Comment