Podcasts about Enrico Moretti

JULIE BAUKE JOINS DAWN LIVE! Julie is the President & Chief Career Strategist @ The Bauke Group! Follow her @JulieBauke  Julie expands on the state of the workplace - responding to prompts including.... REMOTE WORKERS IN FOR A RUDE AWAKENING? GRADS WON'T APPLY FOR JOBS WITH NO PAY RANGE 71% BLAME WORK STRESS FOR BREAKUPS/ DIVORCE FEW WOMEN IN THE "C SUITE"? ENROLLMENT AT TRADE SCHOOLS SPIKE SEE BELOW IN ORDER...  According to Business Insider, new research indicates remote workers may regret fleeing big cities for cheaper rural communities. We've heard a lot about how the mass migration has been bad for major cities, sending them into a "doom loop" of empty offices and shuttered storefronts. But a new paper coauthored by Enrico Moretti, one of the best thinkers on the geography of jobs, highlights the dangers the migration poses for the very professionals who are ditching big cities. Moving away from a major city, Moretti found, can be terrible for your career.Moretti, an economist at the University of California at Berkeley, followed workers whose companies shut down between 2010 and 2017. How people fared after that depended on where they lived. Those who lived in small labor markets were less likely to find a new job within a year than those in large labor markets. To get back on their feet professionally, those in small markets were more likely to be forced to relocate for employment. They were also more likely to settle for a role that was misaligned with their college degree, or in an entirely different industry. "The big takeaway is that market size matters," Moretti says. "It's clear that larger markets improve the quality of the match..." Let's say you're a coder specializing in AI. You're far more likely to find a job in San Francisco than you are pretty much anywhere else in the world, because there are a lot of AI-related companies there. And it's because AI specialists flock to San Francisco that AI businesses set up shop there in the first place. That's how cities become hubs for particular industries, like finance in New York and fashion in Paris. And that's why people put up with all the downsides of cities — because it increases their odds of growing their careers. Moretti's new paper confirms that when it comes to jobs, geography is destiny. At first it seemed as though the pandemic had rewritten that rule. With the rise of remote work, professionals thought they could afford to leave their expensive cities without a risk to their careers. If you moved to Des Moines and wound up losing your job, you could just stay put and get another work-from-home gig. Your house might be in Iowa, but your job market was still back in California or New York. Over the past year, more and more employers have stopped hiring for remote roles. The market for WFH jobs has cratered, putting everyone who moved away from big cities at risk. If they wind up getting laid off or they outgrow their current role, living in a smaller job market is going to severely limit their career options. As Moretti's paper shows, they'll either (1) wind up unemployed for a long stretch, (2) be forced to settle for a local job they're overqualified for, or (3) have to make an abrupt and costly move back to the big city they abandoned. Moretti characterizes being in a large labor market as "insurance" against future shocks. Living in a big city isn't just about having a good job right now. It's what sets you up for success to land your next job — and the job after that. Those who moved away from big cities effectively gave up their career insurance. Is Moretti correct that fleeing a city is risky for remote workers? (Business Insider)Employers that don't share pay ranges in a job posting may lose out on talent from soon-to-be and recent graduates.According to a new survey of recent and upcoming US post-secondary and recent graduates, 85% reported they are "less likely to apply for a job if the company does not disclose the salary range in the job posting." That's according to Adobe's Future Workforce Study. The December survey, conducted with Advanis, included just over 1,000 respondents who were US post-secondary students and recent graduates. Read more. Are Gen Zers making a mistake by not applying for jobs if the salary isn't listed? According to Men's Journal, a new survey finds work-related stress is leading to an abnormally high rate of breakups and divorces, with 71 percent of respondents reporting that work stress caused a personal relationship to end... The findings were part of the sixth annual workplace mental health trends report published by the meditation and mindfulness app Headspace. The company partnered with Dimensional Research to survey over 2,000 employees in the United States and U.K., as well as over 200 CEOs and 245 Human Resources leaders. How can you keep work-related stress from impacting your marriage? (Marketplace)The number of women in senior corporate leadership has grown every year since S&P Global started tracking gender parity among executives in 2006. That is, until last year. In 2023, women lost C-suite positions across publicly traded firms, with their representation dipping below 12%. Read more. What's driving this trend? According to Morning Brew, enrollment in trade schools is skyrocketing.The number of students enrolled in vocational-focused community colleges increased 16% from 2022 to 2023, according to data from the National Student Clearinghouse.The number of students studying construction at two-year undergraduate programs rose ~12% since 2021.Why? Four-year schools used to seem like the most straightforward path to a high salary, but with their costs going up, they also lead to a lot of debt. Meanwhile, a shortage in skilled workers has driven up workers' earnings: Median pay for construction workers rose more than 5% last year to $48,089, compared to $39,520 for new hires in professional services (like accountants and IT workers), according to payroll provider ADP. Plus…software can't repair a leak in your roof (yet). In a recent survey, the majority of young people said blue-collar jobs seemed more secure than white-collar ones amid developments in generative AI technology that could render some jobs obsolete. How can parents help their college-age kids decide if college or a trade/vocational school is the best option? And what skilled trade jobs will still be viable in twenty years? Julie Bauke (rhymes with NOW-kee) can offer advice. She is Founder and Chief Career Strategist with The Bauke Group. Julie also worked for 16 years in HR. She is the author of the book, Stop Peeing On Your Shoes: Avoiding the 7 Mistakes That Screw Up Your Job Search.  Tune in weekdays 10 AM - 12 PM EST on Talk Radio 1210 WPHT; or on the Audacy app!

William Strange is a Professor of Economic Analysis and Policy at the Rotman School. William is former Editor of the Journal of Urban Economics (with Stuart Rosenthal), and he served in 2011 as President of the American Real Estate and Urban Economics Association. He works in the areas of urban economics and real estate. His research is focused on agglomeration, industry clusters, labor market pooling, skills, private government, real estate development and real estate investment. In this episode we talked about: William's Background and how he got into Real Estate Rotman School Real Estate Program Paper Analysis of Skyscrapers Macroeconomic Outlook Urban Economics Resources Useful links: Book “Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier” by Edward Glaeser Book “The New Geography Of Jobs” by Enrico Moretti https://www.rotman.utoronto.ca/FacultyAndResearch/Faculty/FacultyBios/Strange.aspx Transcription: Jesse (0s): Welcome to the Working Capital Real Estate Podcast. My name's Jessica Galley, and on this show we discuss all things real estate with investors and experts in a variety of industries that impact real estate. Whether you're looking at your first investment or raising your first fund, join me and let's build that portfolio one square foot at a time. Ladies and gentlemen, my name's Jesse for Galley, and you're listening to Working Capital, the Real Estate Podcast. My guest today is William Strange. Will is a professor of economic analysis and policy at the Rotman School that's at the University of Toronto.   He's the former editor of the Journal of Urban Economics, and he served in 2011 as president of the American Real Estate and Urban Economics Association. He works in the area of urban economics and real estate. His research has focused on industry clusters, labor market, pooling skills, private government, real estate development, and real estate investment. Will, thanks for being here. How's it going?   William (58s): Thanks a lot for having me, Jesse. It's going great.   Jesse (1m 1s): Well, I appreciate you coming on. Like we said before the show, I thought there's a couple different areas of research that I thought we could jump into and, and I think the listeners would get a lot out of. But before we do that, why don't we kind of circle back to you in, in your current role at the University of Toronto and kind of what you're working on today, how did that all come to fruition? How did you get into, into this business of real estate?   William (1m 25s): Well, I got into real estate as an urban economist, so when I went to graduate school, my favorite undergraduate econ class was urban. I liked it because there are so many things going on in cities. Cities are just interesting organisms. And so I, I pursued a PhD at Princeton with Ed Mills, who is the father of the feet, modern field of urban economics. That ended up with me at U B C amongst the real estate folks. And I gradually came to understand just how interesting real estate is too, and just how much an urban economist will have to say about real estate, you know, both on the residential and commercial side.   I feel incredibly fortunate that I've lucked into a, a career as satisfying as this one has been.   Jesse (2m 8s): That's great. And the current role that you have at Rotman, so for people that aren't, aren't familiar, that's the, the business school at the University of Toronto. The, the teaching that you do there, is it predominantly undergrad is,   William (2m 21s): It's almost entirely MBA and PhD. I teach some vanilla economics, which I think is important too. Yeah. But, but we also teach a bunch of econ cla a bunch of real estate econ and real estate finance classes. One thing that I would say to your audience is I'm also the director of the Center of Real Estate at Rotman, and we periodically put on public events, we put on one on downtown recovery back in December that was addressing the different pace at which downtowns were repopulating as Covid fingers crossed, recedes.   And, and we were scheduled to do a housing market one with City Post in March, and we'll keep doing them as interesting policy issues emerge. We are, we, we welcome people from outside Rotman. Please come everybody.   Jesse (3m 12s): Yeah, that's great. The, and we want to jump into one of the papers that you did, you did regarding covid. Before we do that though, I'm curious, you know, people in our industry, when we think of schools that have a real estate program at the MBA or or higher level, you know, whether it's economics or finance or real estate, I think of, you know, Rotman, I think of Osgood. A lot of people have gone to Columbia and New York for their Ms. Red program. Has that, how long has that program been the real estate specific aspect of it? How long has that been something that has been at Rotman?   Because I, I feel like you guys were one of the first to actually have the, that specialization.   William (3m 48s): It's nice of you to say, but it was, it started building up when I came in 2001 and we've specifically p positioned ourselves to not duplicate other programs. Like I, I, I like the SCHOOK program very much, but there's no reason that we need to do something that's as specialized as their program is, given that they already have such a program that's, that's a good program. So what we have done is to set up a smaller real estate program. We have three electives of the 10 classes and MBA would take with the idea being that people in real estate benefit from taking things outside of real estate, you know, that a good real estate person needs to know about finance, a good real estate person needs to know about strategy and my various colleagues in Rotman can help in those ways very much.   Jesse (4m 33s): Yeah, no, that makes sense. So before we, we jumped on here, we, we talked about a paper that kind of pid my interest and it was just being in the commercial real estate world and it was a basically a, a paper analysis of skyscrapers. I thought before we jump into this Covid paper, we could talk a little bit about this, this paper that you did regarding skyscrapers.   William (4m 53s): The skyscraper paper is still pretty relevant. I mean, what it's motivated by is that we're living in a new era of skyscrapers that if you look at something online like the skyscraper page, you can see the big buildings that people are planning to build. The Empire State Building was the biggest building in the world for on the order of 40 years before the World Trade Center. It has since been sub topped by Burge Dubai. And there are other buildings that are, are also really large that are either recent or, or that are being planned.   The big question is, are these big buildings being built big because it's economical to do so? Or are they being built big for some other reason? You know, possibly ego reasons, possibly other stuff. And so we have analyzed skys, this is in my paper with Bob Helsley from UBC. In this paper we look at skyscrapers as a contest for who is the biggest, this, this is assuming that people want to be bigger than the other person. Let me give you a couple of historical examples of that.   I mean, people did look at whether h skyscrapers were economical in the 1930s after the big skyscraper wave of the twenties and thirties. That was mo allowed by things like structural steel and elevators. And we see there a lot of stuff that looks game theoretical. So one story is the story of the lower man of the Manhattan Company building, which is now Trump's lower Manhattan building. And, and, and the incredibly beautiful art deco Chrysler building.   And they were each built to be the biggest building in the world at the time. Manhattan Company building finishes first, so it has a ceiling on it, and they are very happy because the ceiling on the sky on the Chrysler Building is, is gonna be lower. So for some reason, the Chrysler building did not build an extra a hundred feet that would've made them bigger than the Manhattan Company building. And, and this has an added issue of personal interest, that the lead people on both of those projects hated each other. They used to be partners. There was a breakup of their partnership and, and not the owners of the buildings, but the architects despised each other.   Unbeknownst to the people who built the Manhattan Company Building with the Chrysler Tower, the most famous thing about it, if, if the readers Google it right now, you'll see it is the spire at the top. It was hidden inside the structure, so people didn't know what happened. And so they waited until the Manhattan Company building had reached its ceiling and then they raised like a giant middle finger, the spire of, of the Chrysler building, which made it an extra 50 feet taller than the Manhattan Company building. It's really hard to argue that there is some economic tenants paying rent sort of argument that would make you do something like that.   That's one example. Another example is the Empire State Building, which I mean we've all seen King Kong bu movies, so we know how the Empire State Building looks, but, but the, you may not know that the spire on top of the Empire State Building, which made it by a couple hundred feet bigger than the Chrysler Building when it was built, that was originally pretended to be a Zeppelin loading dock. So people would be taking international flights by blimp and, and on top of Manhattan where winds are pretty big, they, they would tie the Zeppelin on and then people would get off on on it.   No one ever did that. That was just totally a fiction to allow the building to be as big as it could possibly be. So in, in, in this paper, we look at that as what is called in game theory and all pay auction. That's an auction where you have to pay, even if you don't win in, in this case, you pay to build the building even if you don't win the race of having the very biggest building subsequent to our paper, which was theoretical. Others have looked in various ways for empirical evidence in the data, and there seems to be a lot of it around the moral of the story being some of these big buildings look like they should be built based on economics, or at least you can make a justification of building such a big building on economic grounds.   But there's a lot of evidence that people wanna build a little bit bigger than the other guy, even if it's not economical because of the prestige that seems to go with being the biggest building in a market or in the world or of a particular type. If you look online, you'll see all kinds of lists of, you know, biggest office building, biggest residential building, biggest building in Canada, biggest building in Toronto. It seems to be something that people do care about and not simply just the economics of, of building real estate space for tenants to use.   Jesse (9m 29s): Yeah, that's a fascinating story. I'm almost embarrassed to say I I had never heard of that. So they continued to build with regard to the Manhattan Chrysler, they continued to build hiding the spire within, within the   William (9m 41s): Envelope, within the structure because the seal structure, you know, you can have it own. And then they literally leveled it up. There's a, I forget who wrote it, but there was a book, there's a book on this whole episode, which I think is a fascinating story. Yeah.   Jesse (9m 51s): Oh, that's great. Yeah, that it's, it's interesting too, I'm reading a book right now that New Kings of New York by The Real Deal, and it talks about a lot about kind of the Trump era of New York when it was the, the basically push to build more and more price per square foot condos, high-end condos. And it was really almost a race of who could build the best, the the tallest. And it became a lot of, seemed to be a lot about ego rather than economics.   William (10m 16s): Yeah, I mean, I think ego matters in real estate. Look, I mean, I I'm just a professor, I just write papers. Somebody who actually builds tall buildings can, you know, look at this thing that they've built and I understand why people's personalities are invested in it and why, you know, they wanna build buildings that are deemed to be significant. I mean, for a long time the, the CN Tower was the biggest structure in the world, and people make a distinction between occupied buildings and unoccupied structures. And so, you know, clearly we in Toronto are, are not immune to building buildings for ego-based reasons.   Jesse (10m 51s): And it was there a distinction in your research between commercial skyscrapers as opposed to residential towers? Or, or was it,   William (10m 59s): I mean, the early ones were, were all commercial and, and well, I mean the Eiffel Tower shows people how structural steel lets you build stuff that's big and then the Woolworth building becomes the biggest building in the world. And then as supplanted, as I said a little while ago, briefly by the Manhattan Company building the, whatever the Trump building is in lower Manhattan and, and Chrysler, they were commercial. But now, now we see people building big residential buildings. I mean, it, it can be problematic. The, the, the former Sears Tower, and I'm having a brain cramp now about its current name, Willis Tower.   I believe it, it was renamed a while ago. It had a problem after its initial construction because it was big enough that the building swayed in the wind and, and this made people feel very uncomfortable. And so there was a period of time and it, it could continue. I'm not sure whether it is or the tallest, the, the, the highest suites in that building were used for storage because people didn't wanna be up there because it wiggled around too much. Yeah. And, and, and just made them uncomfortable for residential.   I mean, I don't know what your experience is, but I have a friend who was on the 40th floor of a Toronto building and which, you know, he thought was beautiful, gave him a view of the lake and so on and so forth. But during covid when you don't wanna be in the elevator with a lot of people or worse still, if the elevator is slower is not running, you know, 40 stories is a long ways to walk.   Jesse (12m 24s): Yeah, absolutely. Well the one with the Willis Towers kind of, that'd be Chicago too, so I I'm sure it, it, it'd get pretty windy up there. I think for us, if, if I'm not mistaken today, our first Canadian place, at least in the Toronto area.   William (12m 38s): Yeah. Ever since it's been built, that's been the biggest building in Canada and it's, it's of course commercial. Yeah. There are some things that I believe people are considering that might be bigger but haven't been built yet.   Jesse (12m 48s): So you, you mentioned something that you ask your class at Rotman question that I, right before we got on this call, I would, I would've failed and can pose the question to, to listeners that you normally ask your class at Rotman.   William (13m 2s): Well the, I mean, I I've said that this is an era of skyscraper construction and I've talked about the earlier one. And the question is what is it that it took for us to have skyscrapers? And it turns out there are two things that it took. It took structural steel and it took elevators. And before I ask the question, I can give you the elevator story because that is also one that's worth hearing. Sure. Elevators are old. They're like, they're like, Archimedes figured out how you could use pulleys to lift things. The problem with a, a classical elevator is if the cable was cut, the elevator would fall and whatever was on it, including humans would be destroyed.   And, and, and thus elevators were not used, you know, for large distances for human beings because it was just considered to be too dangerous. The name that most people will associate with elevators is Otis. And, and Otis went to the New York World's Fair in, I believe 1856, give or take two years. And he demonstrated his safety elevator. And the way he did it was he was pulled up in the elevator with a very sharp sword in his hand to about 40 feet with an audience watching him. And then he cut the cable above the, the rope that was on the elevator above himself and the audience went, Ooh, because the, they, they were sure that he was now going to fall to his death.   But the Otis elevator's innovation was, it didn't fall, it was a safety elevator and it had automatic brakes that would arrest it. Before that you wouldn't see apartment buildings that were any bigger than six stories. Cuz you know, six stories is a lot to walk up. You wouldn't wanna walk up 10. But now once you have elevators, vertical distance is not a barrier anymore. And that really changes the ability, the demand for big buildings on the supply side. This is my question, what was the biggest building in the world in 1850 around when the elevator was developed and before skyscrapers were, were started to be built?   So I'll leave leave you a minute to think about it. Look it up on Wikipedia or, or whatever the answer is that the biggest building in the world was the great pyramid from something like 1400 bc. Why is that worth mentioning? Because it's a masonry building and, and the key feature of masonry buildings is that the supporting walls on the lower floors have to get bigger and bigger as the building gets taller in or in order to bear the weight to say, to say nothing of earthquakes and other problems with masonry buildings, structural steel changes that structural steel lets you go up.   I mean it's, it's incredibly robust. We don't always use structural steel. Now the World Trade Center did not to, to its peril. It used much lighter framing. And that was one of the things that meant that the intense heat that the airplanes produced when they hit the building were able to bring it down. That's a worthwhile story to to point out because the Empire State Building was also hit by an airplane during World War ii, which people might not know about because the Empire State Building is still there. Yeah. It was foggy and a, a World War II bomber crashed into it, but because it was structural steel, it basically bounced off.   I mean, it was, was not good for the airplane and not good for the pilots, but it, it survived. But we've learned cheaper ways to build buildings subsequent to that without structural steel. And that seems to be one of the factors that's responsible for the skyscraper wave that we have seen in, in recent years with Birds Dubai. Now the tallest building in the world for a while, Taipei 1 0 1 was, was the biggest building in the world. You have very tall buildings being built in, in many Chinese cities, especially Shanghai.   People are building big buildings, you know, and, and part of it is the strategic thing that we talked about a minute ago in the case of Taiwan. I mean, if you read about that building, it's clear that this was a matter of great national pride. And so the Chinese were building it to make Taipei obvious as an important business city and to make, to make Taiwan an an important place. The same sort of thing in places like Birds Dubai, I mean, what will be the financial center in the Middle East, it's, it's not obvious what it would be having big buildings, you know, they're hoping that if they build it, people will come.   Jesse (17m 10s): Hmm. Yeah. That's fascinating. Well it was good to, good to jump on that cuz that paper I saw that the title and I was like, well it's got economics, it's got skyscrapers. So just being from the commercial real estate side of things, I thought it'd be something listeners get some value out of. Well, I   William (17m 24s): Mean, so for, for your readers who are in the industry, I mean, it's a valid question for folks to ask. Do the economics justify such big buildings? I mean, in, in a lot of cases they do. People were convinced that the, say the Empire State Building did, of course the Great Depression happened begin after the Empire State Building was started and before it was finished. And so the Empire State Building was financially rather a disaster. It was called the Empty State building for about the first 10 years because they had so much trouble tenanting it up.   And so this is something that market participants should ask themselves. Does the market support a big building or is there something else that's going on with the building's size?   Jesse (18m 2s): Yeah, well we're certainly going through a, you know, a different version of that in terms of some of the construction or or over construction in some of our major cities. And just trying to see if the, if the lease ups will, will actually, if the absorption will be able to fill those buildings.   William (18m 18s): Right. I mean, we had buildings that were designed pre covid and that came on the market in 2022 and are partly responsible for the slow absorption that we've seen in recent years. I mean that's a, a very valid point. I mean, a lot of my other research has dealt with the fundamentals of why people want to concentrate spatially. Hmm. So, I mean, in Canada, a huge amount of our population is in the three cities of Vancouver, Montreal and, and Toronto. Yeah. In, in the case of the US when people use satellite data to look at how much of the country is actually occupied.   So you're looking at data that reflects down on the land and the satellite can tell you, is this dirt or is this concrete? The US is a big country, 2% of it is developed. I suspect the number would be even smaller in Canada. But I haven't seen somebody use satellites to do that. So we have this situation when Toronto and Vancouver at least are incredibly expensive when households say that affordability is the biggest issue that they face economically, not just real estate, it's the biggest issue that they face.   And yet everybody keeps piling into Toronto no matter how expensive it is. And thus prices continue to go up and up. I mean, I think one of the silver linings we may see from Covid is, is that through Covid we have learned that remote work is possible, can't do everything remotely that you can do in person, but you can do a lot. And that to the extent that Covid allows people to do things remotely, you know, either at different places in the same city or even in different in in, in different cities completely.   That may make it less essential for everybody to be down at bay in Adelaide, you know, paying the high rents that people pay down there and thus paying the high housing prices that you have to pay to be close to bay in Adelaide for your job as an investment banker, you know, this is a possibility to un unlock value for folks by freeing them from the Toronto housing price death spiral that people have been dealing with for so many years.   Jesse (20m 19s): Yeah. And we're, and we're dealing with, so we have 84 offices predominantly in, in North America, but we are a global company. And it's one thing where you are taking a b class or a suburban office and converting it to industrial or residential. It's, it's another thing to have these massive towers in cities and just trying to figure out how we repurpose the space, whether, you know, and   William (20m 39s): People are sure talking about that and there's, there's certainly fortunes to be made in people who feel how to figure out how to do it. Right. But I mean, what I'm hearing, and I'm, I'm nobody's architect, but what, what I'm hearing is the challenge of the seven and a half foot ceilings that you might see in an office in a residential setting are really problematic. And you can make a lot of internal changes in the building, but dealing with the floors is, is hard.   Jesse (21m 1s): Yeah, absolutely. And I think some of what you just mentioned here touched on, I noticed another paper on, on your, on your link on U F T or on Rotman's website was entrepreneurship in cities. And, and I imagine that kind of ties into what you're, what you're talking about here, it's that question of why do we congregate in these   William (21m 18s): Metropolis that, that there's something in downtown Toronto that people are willing to pay for. The market tells us that this is valuable. Both the housing market and the commercial real estate market say that Toronto's expensive people aren't throwing away the money for no reason they're paying it because it's a good, good value. As expensive as it might be. I mean, I like my job in Toronto, thus I'm willing to pay a whole bunch of money for a house here cuz I have to live here in or in order to be able to teach in, in, in the Rotmans school. So that, and a whole bunch of other things.   But, but ever since the dawn of the internet, some people have been arguing that distance is dead. And and I think that's wrong. Distance isn't dead. Maybe it smells funny, but it isn't dead yet. And in, in thinking about Covid, there was a New York Times op-ed that Jerry Seinfeld wrote titled New York City Is Not Dead. He wrote this in response to a friend of his, a fellow who owned a comedy club arguing that New York City was dead. And in this case, I'm happy to say that I agree with Jerry that that places like New York and Toronto are for sure challenged by, by things that happen associated with C O V D.   You know, two years ago what we were worried about is making each other sick. We are less worried about that as the disease has become less virulent as we and as we become vaccinated. But you know, hopefully, you know, COVID is killing 500 Americans a day. I don't know how many Canadians it's killed killing a day. Are we are much healthier than America is in that particular regard. But in, in addition to that being a challenge for folks, the working from home phenomenon is almost certainly here to stay.   It's just incredibly valuable for people to stay home and write reports for a day instead of fighting traffic to drive 45 that's from North York downtown, and then do the same thing again in the afternoon. So anyway, Jerry's friend wrote an article saying New York was dead. You know, that that that the value of being close to other people was, was really being challenged. Seinfeld said, no, it wasn't. We did some work using contemporaneous data. So the only time in my life I've used absolutely fresh data off the process and I I now have more patience with other professionals who use that, who use that kind of data.   It's just a lot harder to do stuff with that. And we looked at something called the commercial rent gradient. So the commercial rent gradient is telling you how much rents are declining as you, you're moving away from, from the city center. And so, so in Toronto, rents are highest in the city center. They go down as they move away, they rise in suburban sub-centers. We were not able to get good Toronto data to do these calculations here, but we did do it in cities that are like Toronto in the us like New York and Toronto and in and in cities like that, the gradient might be 6%.   So my, my co-authors were American, so they made me do this with miles, but the result was rents are declining by roughly 6% a mile as you move away from the center of activity in the city. If, if the big cities are dead, you know, given the long term nature of commercial leases, we should see people demanding large discounts when they're signing up in the downtown or, or close to the downtown, not paying the premiums they previously paid with the onset of covid and work from home and stuff like that.   What we found was a little of that, but not a lot of it. What we found was that the gradient went down by about a sixth. It went down from about 6% to about 5%, but it's still a gradient. People are still signing leases in 2021 to pay a big premium to be downtown, which is suggesting that, you know, as mu as much fun as Zoom can be and as productive as Zoom can be, it's not the same thing as sitting next to the other person and, and hearing them talk with their clients and realizing there's some synergy with what you're after and what they're after, which is the kind of thing that people are paying big dollars to locate downtown and getting.   So our answer is so far the downtown is less attractive, but is still attractive in, in core dominated cities like Toronto. Now can I tell you that it's gonna be that way five years from now? Of course I can't And and we do promise I'm saying this to someone who will broadcast it. So I guess this promise has some credibility. We promise that once, I mean our intention was once Covid is behind us, do this again. We are realizing that Covid will not be behind us and we'll have to pick another time to do it again and see what the evolution of this is.   But thus far we're still seeing people attracted to large cities. One scenario would be that this is a continuation of a phenomenon that Toronto saw in the late eighties and the nineties when back office stuff got moved out of Toronto to Mississauga and then later to places that are farther away than Mississauga. You know, people thought, oh no, the downtown's going away. No. What we were doing was we were keeping only the people downtown who really need to be there, the people who really need to be there to interact with other folks, you know, that that's what really matters and not the fact that the physical files are located in the building there.   Yeah. So this may be the same kind of thing where downtown Toronto just becomes more and more rarefied. Yeah. You know, that the investment bankers stay there, but maybe not the middle managers now that, that that is a social issue that we have to engage with, you know, if Toronto just becomes a city of investment bankers and Uber drivers. Yeah. You know, which is sort of the story that I'm telling you. Yeah. But at least that evidence and that theory points us in the direction of that being someplace we could end up.   Jesse (27m 4s): Yeah, no, for sure. And I think for the, you know, kind of the anecdotal side of things, what we see on the street is we see leases being signed. We see that there is a bit of a spread between the bid ask, but it, but it's not at the discount, which we, you know, I have clients they call me and Yeah, especially in the middle, at the beginning and in the middle of Covid, they're expecting these 20%, 30% discounts, you know, on pricing and for leasing and they just weren't happening. Landlords were providing inducements, whether it was free rent allowances. But even today, we, we still see these leases being signed and if anything, the trend that I've seen with most of the clients in the downtown areas, whether it's New York, Boston, Toronto, is that there's a, you know, the term flight to quality gets thrown around a lot.   We're seeing a lot more of that. And we're seeing, I agree completely, we're seeing even four years ago where a startup might want to be in a trendy area in, in the periphery of Toronto or of New York, and we're starting to see more of them have transit as a component. Not that it wasn't important before, but it's, we're seeing that almost pretty much at the top of the list for these, for these tenants.   William (28m 5s): Yep. Transit matters and, and the businesses are deciding they wanna be where the accountants and the business lawyers and the, the bankers are, you know, because they need to interact with them all the time. So I mean, the flight quality, I've heard noises in that direction also that what we would see would be, look, people have been talking about the retail apocalypse for years about online shopping, cannibalizing brick and mortar retailing. Now, did that kill the Eaton Center? It didn't because the Eaton center's in a market position where people are still willing to go there, but it's gonna kill someone.   I've got,   Jesse (28m 37s): I've gotta go there today. There's   William (28m 39s): Good for you. I'm glad one of my predictions ends up being true. Yeah. But, but credit old, old, old fashioned malls, they're getting torn down and, and getting replaced with something different. And I think we could imagine that being something that would happen too. I mean, just something that the audience should think about more generally is that the way the downtown has been for the last 10 years is different than it was 30 years ago, you know, when you had back offices there and it's way different than it was a hundred years ago when there was still a lot of manufacturing activity in the downtown, taking advantage of the proximity to the lake and to shipping and stuff like that.   And so the notion that the downtown should be frozen in Amber as of 2000 or something like that is crazy. It's never been that way. It's gonna change as business changes. And that's a good thing. I mean, that's, that's a way that the ability of Toronto to deliver good, good jobs and high value business outcomes is crucial for all of Canada. And, you know, anything that we can do to make Toronto a better competitor to New York, Boston, and San Francisco very much, much serves Canada's interests.   Jesse (29m 42s): Absolutely. So I wanna be mindful of the time here, will, but I do wanna get to your, your paper, your, I I'm not sure if it's your most recent paper, the one on Covid, but maybe you could give us the   William (29m 54s): Covid one was the one I just talked about a second   Jesse (29m 56s): Ago. Okay. So, so in, in, so what, what was the ultimate thesis of that? Was it this, this divide that we're seeing as, I would say even kind of an inequality of a potential outcome of having downtown cores be predominantly bankers? Or was that, was that the, the other paper,   William (30m 13s): The focus was on whether downtown would still be as important as it used to be. And we looked at, I, I left out some of the results. The, in addition to looking at core dominated cities like Toronto, we also looked at much more spread out car oriented cities like LA and Dallas and stuff like that. And the pattern in, in those places was different. In those cases, the gradient was already smaller. It was, you know, two or 2% rather than the 6%. And it didn't change a lot after Covid, you know, because la the downtown is, is different than the rest of the city.   But LA is not a downtown dominated city the way that Toronto is at all. And Covid didn't affect those. We looked at some parallel results that weren't as parametric, if you'll forgive my geekiness, the gradient puts an exponential functional form to get a percentage decline from the downtown. But look, I mean, how, how are we to think about sub-centers in North York and Mississauga and Markham and places like that in, in, in relative to having one downtown at Bay and Adelaide.   So we also looked at the premium that tenants pay to be in a high density environment. So that's a, a more flexible, functional form. We basically got the same results, which is the value of density does get smaller just like the gradient gets smaller. But it by no means goes all the way to zero. Cities aren't dead yet. Now the changes are just starting and things may change a lot. We may finally, eventually end up in a circumstance where distance really is dead the way people have been saying it would be since the early nineties.   But we're certainly not seeing it yet. And, you know, looking at real estate markets is one way to understand that, you know, because people put it, put their, you know, people can talk about distance being dead, but that's just talk, I mean a tenant paying, putting down a guarantee on, on real estate lease that's putting their money where their mouths are and how much money they're willing to pay for the downtown versus someplace extra or for a dense non downtown location like Mississauga Center of Mississauga relative to somewhere more peripheral.   You know, what we're seeing is people are still willing to pay premiums for those things. This could change, but it did not change in the early years of covid. And you're telling me that your sources say that it's not changing right now yet either. So I think that's where we are as of this minute. Will it change, you know, who knows?   Jesse (32m 39s): Yeah, it's a very, it's kind of a fascinating time in the sense that it's, it's hard to get data points when we're, you know, fingers crossed coming out of Covid, but potentially entering a recessionary environment. So it's, you know, we're, we're positive in one, but then we're drawn back in another. And I'd be re remiss if I didn't ask, if I was speaking to economists and didn't ask a little bit about the kind of macroeconomic environment.   William (33m 2s): I'm not a macro economist, so I'll probably avoid, but by all means you can ask.   Jesse (33m 6s): But, but yeah, I mean, how do you see this? Or if you do at all as a, as a comparison to oh eight or oh one or the early nineties and, and, you know, we, we come out of something that was extraordinary, the pandemic, but now we're entering inflation numbers that we haven't seen in, in years.   William (33m 26s): I, I think it, it, it is absolutely to be worried about because inflation, as, as economists who know more about the stuff than I do have always said it, it reduces the information, content and prices reduces the incentives that price systems have. So it just makes capitalism work less well than it would have previously. So it's certainly a risk. I will say that the government's decision to stimulate the economy during covid kept us from having a recession. I, I mean, I don't know if you recall, but in May of 2020, the C M H C who know a lot about housing more, more than I know about housing, they, their projection said that they predicted housing prices would fall.   I think the number was 18% in, in the preferred model that they offered. Now, I didn't have a model, but that was my inclination also, and also my inclination of the colleagues that, you know, housing is a normal good. People buy more of it when they're rich and, and there, there it seemed closing people out of their workplaces is surely recessionary. So I I I told my neighbor who I like and respect, you know, I I think you should, if you're thinking about selling your house the next few years are, are problematic. I, I was wrong.   I mean, the PR prices went up by more than 30% in Toronto. Quality adjusted during that, you know, in, in part because the government tried to keep people from being killed. But now they've spent huge amounts of money and they can't spend like that forever. And economies don't stay in boom, forever, ever either. So there, you know, there there is uncertainty and, and there is risk.   Jesse (34m 60s): Yeah. Well, I guess, we'll nobody has a crystal ball here for this next year.   William (35m 4s): Especially not Microeconomists and, and people who spent a lot of their careers doing theorists doing   Jesse (35m 9s): Theater. No, I, I, I wouldn't I once sell yourself short. I feel like a lot of the insights come from, from the micro and, and get extrapolated. Well,   William (35m 16s): I, I, unlike micro, I just believe in, I mean, economist, I believe in the division of labor and there are other people who know more about macro than I do.   Jesse (35m 23s): Yeah. So Will, we're, we're gonna wrap up here. What I'd like to do is, first of all, for those that want to kind of learn more on, you know, urban, urban economics, urban planning seems to be a, a passion of yours. But just generally speaking, are there books or resources that you've used in the past that you think would be good recommendations for listeners if this is something they're interested   William (35m 43s): In? Yeah, there, there are a couple of them. And, and I'm, I'm giving you civilian friendly books Okay. That you could read to pass the time on an airplane and not, not a boring textbook. The two examples that come to mind immediately are a book called Triumph of the City by a guy at Harvard called Ed Glazer and another book called New Economic Geography by a guy at Berkeley called Enrico Moretti. They are both lucid explanations of the kinds of forces that we've been talking about. Now both of them are a little less real estate than our discussion has been, but they are about forces that feed into real estate markets.   I mean, someone who's a market participant has to be asking themselves why are people paying the premiums for the downtown? Will they continue to pay the premiums from the downtown? And, and if not, how can I trade on that perce perception? I mean, because there are clearly gonna be places where people who get priced out by Toronto go and those real estate markets are gon are, are, are going to be booms. I mean, I don't think people are gonna go to Vancouver to be cheap, although maybe they will go to Vancouver for warmer winter weather.   A question that I think is, is unsettled as of this moment is, do people who get priced out of Toronto go to someplace close to Toronto like Hamilton? You know, so you can drive in for a Wednesday meeting, but it's cheaper than Toronto is, or do you go somewhere or do you go to someplace like Montreal that is farther but is cheap for a big city? Or do you think about somewhere that's even farther still and, and, and cheaper still like Halifax. I mean the Maritimes are wonderful place a whole lot cheaper than Toronto.   And if a huge amount of your work is Zoom meetings, you know, for some people that location is, is gonna be the more economical place to   Jesse (37m 25s): Be. Yeah, that's, that's interesting. So I've, I've read Ed Glazer's book, I've, I have not read the New Economic Geography. So that definitely put on the reading list for those. Just interested in, in kind of your research will or the Rotman program in general, what, what's the best place to send? And we'll put a link in the show notes.   William (37m 46s): I mean, look, people can email me and I will either respond or not, depending on how many thousands of emails that I get. I mean, for admission to the programs, you know, we are recruiting students every year. I think our, our MBA program is fantastic. We have programs that work at the full-time level and get done faster, but we also have part-time programs that get done that, that work better for professionals. And I actually think there's a, the case for the part-time programs have become stronger in recent years because there's gonna be a lot more times when somebody can meet a professor in office hours on Zoom rather than having to schlep up to the Rotman school af after work.   But, but also we, we have these public events and googling Rotman events. I, I don't know what the le the link would be, but Googling Rotman events is gonna put you in touch with real estate things. But a lot of other things would be useful and we, we try to be good citizens. We're physically close to the center of business in Canada. It's what five subway stops or so to get up here. You know, we want people in the building and now that the building is open, I think people would find it a good use of their time to show up for some of the things that happen here.   I would also give a shout out to the New School of Cities that was formed separately of us at the University of Toronto. This attempts to include the stuff from my world on econ and real estate, but also architects and planning and things like that that also relate to cities. It is the first of its kind in the world, has a fantastic director and I think we'll do very cool things in time.   Jesse (39m 21s): My guest today has been Will Strange, will, thanks for being part of Working Capital.   William (39m 25s): Thank you very much.   Jesse (39m 36s): You so much for listening to Working Capital, the Real Estate podcast. I'm your host, Jesse for Galley. If you like the episode, head on to iTunes and leave us a five star review and share on social media. It really helps us out. If you have any questions, feel free to reach out to me on Instagram. Jesse for galley, F R A G A L E. Have a good one. Take care.

This week I have the pleasure of introducing Dr. Anna Aizer, professor of economics at Brown University and editor-in-chief at the Journal of Human Resources. I am a long time admirer of Dr. Aizer's work and have followed her career with curiosity for a long time. Some of her papers imprinted pretty strongly on me. I'll just briefly mention one.Her 2015 article in the prestigious Quarterly Journal of Economics with Joe Doyle on juvenile incarceration, for instance, has haunted me for many many years. It was the first or second paper I had seen at the time that had used the now popular “leniency design” to examine the causal effect of being incarcerated as a youth on high school completion and other outcomes as well as adult incarceration. Simply comparing those outcomes for those incarcerated and those not incarcerated as a kid will not reveal the causal effect of juvenile incarceration if juvenile incarceration suffers from selection bias on unobservable confounders. So Dr. Aizer with Joe Doyle used a clever approach to overcome that problem in which they found quasi-random variation, disconnected from the unobserved confounder, in juvenile incarceration caused by the random assignment of juvenile judges. As these judges varied in the propensity to sentence kids, they effectively utilized the judges' own decisions as life changing lotteries which they then used to study the effect of juvenile incarceration on high school and adult incarceration. And the findings were bleak, depressing, enraging, upsetting, sad, all the emotions. They found that indeed being assigned to a more strict judge substantially raised one's chances of being sentenced as a kid. Using linked administrative data connecting each of those kids to their Chicago Public School data as well as Cook County incarceration data, they then found that being incarcerated significantly increased the effect of committing a criminal offense as an adult, and it decreased the probability of finishing high school. The kids, best they could tell, mostly didn't return after their juvenile incarceration, but if they did return, they were more likely to be given a emotional and behavioral disorder label in the data. My interpretation was always severe — incarceration had scarred the kids, traumatizing them, and they weren't the same. The paper would haunt me for various personal reasons as I saw a loved one arrested and spent time in jail on numerous occasions. I would see kids in my local community who had grown up with our kids arrested and think of Dr. Aizer' and Joe Doyle's study, concluding the most important thing I could do was bail them out. The paper was one of many events in my own life that led me to transition my research to mental illness within corrections and self harm attempts by inmates even. But there's other personal reasons I wanted to interview Dr. Aizer. Dr. Aizer went to UCLA where she studied with Janet Currie, Adriana Lleras-Muney and Guido Imbens. Recall that when Imbens was denied tenure at Harvard, he went to UCLA. Currie, who had attended Princeton at the same time as Angrist, Imbens' coauthor on many papers on instrumental variables in the 1990s, was an original economist focused on the family, but unlike Becker and others, brought with her that focused attention to finding variation in data that could plausibly recover causal effects. The story, in other words, of Princeton's Industrial Relations Section and design based causal inference, going back to Orley Ashenfelter, was spreading through the profession through the placements of scholars at places like UCLA, which is where Dr. Aizer was a student. In this storyline in my head, Dr. Aizer was a type of first generation member of the credibility revolution, and I wanted to talk to her not only for her scholarly work's influence on me, but also because I wanted to continue tracing Imbens and Angrist's influence on the profession through UCLA. The interview, though, was warm and interesting throughout. Dr. Aizer is a bright light in the profession working on important questions in the family, poverty and public policy. For anyone interested in the hardships of our communities and neighborhoods, I highly recommend to you her work. Now let me beg for your support. Scott's Substack and the podcast, Mixtape with Scott, are user supported. If your willingness to pay for the episodes and the explainers (I'm going to write some more I promise!), please consider becoming a subscriber! Scott's Substack is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.TranscriptScott Cunningham:In this week's episode of the Mix Tape podcast, I had the pleasure of interviewing Dr. Anna Aizer, professor of economics at Brown University in Rhode Island and editor in chief of the Journal of Human Resources. I have had a keen interest in Anna Aizer and her career and her work for a couple of reasons. Actually a lot, but here's two. First, she did her PhD at UCLA when Janet Currie was there, as well as when Guido Imbens was there. Imbens taught there after he left Harvard, for those of you that remember that interview I did with him. Recall my overarching conviction that Princeton's industrial relations section, which was where Orley Ashelfeltner, David Card, Alan Kruger, Bob Lalonde, Josh Angrist originated from, as well as Janet Currie.My conviction that this was the ground zero of design based causal inference. And that design based causal inference spread through economics, not really through econometrics, and econometrics textbooks, but really through applied people. She also worked with Adriana Lleras-Muney, who's also at UCLA now, who was a student of Rajeev Dehejia, who wrote a seminal work in economics using propensity score, who was also Josh Angrist's student at MIT. So you can see, Anna fits my obsession with a sociological mapping out of the spread of causal inference through the applied community.But putting aside Anna as being instrumentally interesting, I am directly interested in her and her work on domestic violence and youth incarceration among other things. I've followed it super closely, teach a lot of these papers all the time, think about them even more. In this episode, we basically walked through her early life in Manhattan to her time at Amherst College, to her first jobs working in nonprofits, in areas of reform and poverty, to graduate school. We talked about her thoughts about domestic violence and poverty and crime along the way, too. And it was just a real honor and a pleasure to get to talk to her. I hope you like it as much as me. My name is Scott Cunningham and this is Mix Tape podcast. Okay. It's really great to introduce my guest this week on the podcast, Anna Aizer. Anna, thank you so much for being on the podcast.Anna Aizer:Pleasure to be here. Thanks so much for inviting me.Scott Cunningham:Before we get started, could you tell us obviously your name and your training and where you work?Anna Aizer:Sure. I'm a professor of economics at Brown University. I did my PhD at UCLA oh many years ago. Before that actually I got a masters in public health. Sorry. I have a strong public health interest and focus in a lot of my work. I'm also currently the co-director of the NBR program on children. That is a program at the NBR that is focused entirely on the economics of children and families. I'm the editor in chief of the Journal of Human Resources.Scott Cunningham:Great. It's so nice to meet in person. I've been a long time reader of your papers because you write about these topics on violence against women. There's not a lot of people in economics that do. And the way that you approach it shares a lot of my own thoughts. I'm going to talk about it later, but it's really nice to meet in person.Anna Aizer:Sure. Nice to meet you, too.Scott Cunningham:Okay. I want to break up the conversation a little bit into your life. First part, just talk about your life growing up. And then the second part, I want to talk about research stuff. So where did you grow up?Anna Aizer:I grew up in New York City.Scott Cunningham:Oh, okay.Anna Aizer:Yeah, I did.Scott Cunningham:Which, borough was it?Anna Aizer:Manhattan.Scott Cunningham:Oh, okay.Anna Aizer:Yeah. Yeah. Upper side. But when I went off to college, I went to rural Massachusetts.Scott Cunningham:Yeah.Anna Aizer:Yeah. I went to Amherst, which is a very small liberal arts college in the Berkshires. That was a very different experience for me. And believe it or not, I was not an econ major.Scott Cunningham:Oh, you weren't?Anna Aizer:In fact I was not. I only took one econ course my entire four years in college.Scott Cunningham:Oh, wow. Wait, so what'd you major in?Anna Aizer:I majored in American studies with a focus on colonial American history and literature.Scott Cunningham:Mm. On literature. Oh, that's what I majored in, too.Anna Aizer:Yeah.Scott Cunningham:Yeah, yeah, yeah. Oh, wow. So early American history. So what, was this was the 1700s or even-Anna Aizer:Yeah. So I did a lot of 17, 1800s, a lot of the New Republic period. My undergraduate thesis was actually on girls schooling in the Early Republic.Scott Cunningham:Oh wow. What was the deal with girls schooling in the Early Republic?Anna Aizer:What was the deal with the girls schooling? Well, it depends. For most of the Northeast, the focused on girls schooling was really this idea that it was a new country, they were going to have to have leaders in this new country, and someone had to educate those leaders. Someone had to educate those little boys to grow up, to go ahead and lead this country. And so the idea was, well, we had to start educating moms so that they could rear boys who could then go on to this great nation.Scott Cunningham:I see. Women's education was an input in male leadership?Anna Aizer:That's correct.Scott Cunningham:Got it. Got it. Wow. Okay. Well, that's interesting. I get that. You start educating women though, I suspect that you get more than just male leaders.Anna Aizer:I think that's right. It was an unintended consequence.Scott Cunningham:Unintended consequence. They didn't think that far ahead. Okay.Anna Aizer:Yeah. That's a very good point to make, because two women who were educated in one of the first schools dedicated to educating women so that they could go on and rear their boys to be strong leaders were Katherine Beecher, who went on to create one of the most important girls schools in Troy, New York. And Harriet Beecher Stowe of course, who wrote Uncle Tom's Cabin.Scott Cunningham:They're related?Anna Aizer:Yeah. They are sisters. They are sisters.Scott Cunningham:Oh, they're sisters.Anna Aizer:They were one of the first sets of girls who were educated in this mindset of we need leaders so let's have some educated moms. And they of course had other ideas and they went and formed schools and wrote incredibly important works of fiction that ended up playing a pretty significant role in the Civil War.Scott Cunningham:Wow. Was this the thing over in England too? Or was this just an American deal?Anna Aizer:I don't know the answer to that.Scott Cunningham:Huh. I guess they have a different production function for leaders in England where as we it's very decentralized here or something. Right?Anna Aizer:Right. So you're saying in England they already had their system of you go to Eaten, and then you go to Cambridge or Oxford. Right. I think that's probably right. So we didn't have that here.Scott Cunningham:Yeah. That's right. I mean, you're creating everything from scratch. And with such a reactionary response to England who knows what kinds of revolutionary approaches you're taking to... That's probably pretty revolutionary, right? Say we're going to teach women even though it's in order to produce male leaders, it's still thinking outside the box a little bit.Anna Aizer:Yeah. I suppose that's true. Yeah.Scott Cunningham:That's cool. How come you didn't end up in... So you end up at Amherst. As a kid in Manhattan, what were you doing? You were reading books and stuff? You were a big reader?Anna Aizer:I suppose. Yeah. I suppose so.Scott Cunningham:Is that what drew you to Amherst, a liberal arts college?Anna Aizer:I don't really know. I don't think I actually knew what I wanted until much later in life. I was an American studies major, which at the time I learned a lot. It took me a while to gravitate to economics. Once I did, it was clear that that was really the right path for me.Scott Cunningham:Yeah. One question I want to leave your kid. So your parents let you ride the subway when you were a little kid?Anna Aizer:Oh yes.Scott Cunningham:Oh gosh. I bet that was so cool.Anna Aizer:Oh yes. I grew up in New York City during the '70s and '80s, which was far more dangerous than it was today. But at that time parents had a much more hands off approach to parenting. I think I was eight years old when I started taking public transportation by myself.Scott Cunningham:Oh my gosh. There was latch key parents back then?Anna Aizer:Sure.Scott Cunningham:So you jump on the subway. Where are you going at eight years old in Manhattan?Anna Aizer:You go to school.Scott Cunningham:You're just catching the subway to go to school?Anna Aizer:Yeah.Scott Cunningham:Oh, that's so cool. I bet you had a great childhood.Anna Aizer:I have to say it was pretty good.Scott Cunningham:Oh man.Anna Aizer:I can't complain.Scott Cunningham:Yeah. I grew up in a small town in Mississippi, but it was the same kind of thing. Well, it was very different than Manhattan, but just being able to have that level of... It's all survivor bias. The other kids that are getting really neglected and abused. But those of us that made it out a lot it's like, all you have is great memories of being able to do whatever.Anna Aizer:Right. Agreed.Scott Cunningham:So you wrote this thesis. At Amherst, did everybody write a thesis? Is that real common?Anna Aizer:Most people did. I think a third of the students wrote a thesis. It was very common.Scott Cunningham:But you're gravitating towards research, though?Anna Aizer:Yeah. So it was clear that I really, really enjoyed that a lot. In fact, more recently in my economic research I have done a lot more historical work than I had done initially. So I think that training has really come in handy.Scott Cunningham:Yeah. What did you like about that project that you wrote your thesis on? What did it make-Anna Aizer:Well, it was really a lot of fun. I focused on two schools in particular. I focused on this school in Lichfield, Connecticut, and another school in Pennsylvania, a Quaker school in Westtown. I focused on those two schools because those two schools, for whatever reason, kept a lot of their records. They have really wonderful-Scott Cunningham:Oh my God. You had their records?Anna Aizer:Yeah. So you have really wonderful archives where you could just go through and read all about what they were thinking about, when they founded the schools, what the curriculum should be like. And even some of the writings of some of the students and teachers.Scott Cunningham:Oh my gosh.Anna Aizer:So it was really just a tremendous amount of fun to read all of that stuff, all that primary materials.Scott Cunningham:Oh my gosh. Wait. Did you actually have the names of the kids? Did you see their-Anna Aizer:Sure. They had all of that.Scott Cunningham:Did you have the census records and stuff?Anna Aizer:Oh, I guess you could. I mean, this was so long ago before people were doing all that cool linking, but yeah, you absolutely could.Scott Cunningham:Oh, that's so neat. I wonder where those kids ended up. What did it make you feel doing that research, that was so original and just being out there in these archives?Anna Aizer:Well, it was just amazing how much you could learn by just peeking into people's lives. It was really exciting. It was really fun. And you just felt like you were discovering something new.Scott Cunningham:Yeah, yeah, yeah, yeah. So you liked that. But that's interesting because some people would be like, oh, discovering something new. I don't even care about that. When you were discovering something new, you were like, I like this feeling.Anna Aizer:Yeah. Yeah. I really did.Scott Cunningham:Yeah.Anna Aizer:I really did.Scott Cunningham:Yeah. So what happened? So you graduate?Anna Aizer:I graduated. My first job was actually working for an Alternative To Incarceration program in New York City. So I moved back home. You have to remember, this was early mid '90s, and this was the peak in terms of crime rates in the country, and in New York City in particular. And the jails-Scott Cunningham:Before you say this, when you were growing up, did your parents... Was it like people were cognizant... I mean, now you know, oh, it was the peak because it's fallen so much, but what was the conversation like as a kid about crime?Anna Aizer:In the '90s in New York City at this time, that was really the crack cocaine epidemic, so there was a lot of talk about that. That really did dominate a lot of the media at the time. It really was a big concern.Scott Cunningham:Yeah. Yeah.Anna Aizer:As we know, the city and the state, not just in New York, but nationally, really responded with very tough on crime approach, started incarcerating a lot of people. So much so that they were really out of space in the New York City jail. So Rikers Island was at capacity, even upstate prisons were pretty full. The city, not because they were concerned that we were putting too many people in jail, which has... After the fact we know that we did put too many people in jail, that there was a cost to these incredibly high incarceration rates.Anna Aizer:At the time, the concern was that we don't have enough space, so what are we going to do? The city funded an Alternative To Incarceration program for youth. It was called the Court Employment Project. It was really focused on kids between the ages of 16 and 21 who were charged with a felony in New York state Supreme Court. And these were kids who were being charged as adults, treated as adults in the system. New York City has since raised the age of majority, but at that time it was 16. So we were focused on really younger 16 to 21. Well then, most of the kids we were working with were 16 to 18.Scott Cunningham:What kind of felonies are we talking about? Is this the drug felonies? Or is it [inaudible 00:15:51]?Anna Aizer:Yeah. So a lot of it was possession with intent to sell, selling. But also robbery, that was pretty common as well. We were only working with kids that were facing at least six months in adult prison, essentially. That was the rule for our program. Because again, our program was really focused on trying to reduce the number of people who were being detained and incarcerated for long periods of time. So we were only dealing with people who had-Scott Cunningham:Wait, real quick. So you're in your early 20s?Anna Aizer:Yeah. So I would've been about 23.Scott Cunningham:How'd you find this gig? You were just going back to New York City? Or what was the deal?Anna Aizer:Yeah. I knew I wanted to go back home. At that time, jobs were advertised in the paper, so you looked through the help wanted ads and you just sent cover letters and resumes by mail to whatever jobs appealed to you. I was interested in those jobs. I was also interested in working with public defenders, so the Legal Aid Society in New York, I applied for a number of jobs there.Scott Cunningham:Where's this coming from? What's your values exactly at this time? You're concerned about poverty or concerned about something? What's the deal?Anna Aizer:Yeah. I think I guess I already was really worried. I was really concerned about low income kids who were really... I felt already were getting derailed at very young ages in a way that I thought would be very hard for them to recover. I think that in that sense was really confirmed when I started working that these were kids who in a split minute their lives were just totally changed. So certainly in the case of things like robberies, these were often group of kids with not much to do, just getting into trouble, and it just getting too far too quick. And before they knew it, they were facing two to six years. I mean, it was just really tragic.Scott Cunningham:Yeah, yeah, yeah. Yeah. I know. Six months. You think about it, too. You're looking at these six months in the program. You start looking at six months and you think, oh, that's six months. The thing is, those things cascade, because six months with a felony record serving prison becomes de facto a cycle of repeated six months, one year, two years.Anna Aizer:Sure.Scott Cunningham:You just end up... Well, that's going to be a paper that you end up writing, so I'll hold off on that. Okay. So you end up applying, you spray the city with all these resumes. And then this thing. So what is this company? This is a nonprofit?Anna Aizer:Yep. So it's a nonprofit that had a contract with the city. They had a contract with the city. Again, they were funded really because the city could not afford to put any more people on Rikers Island.Scott Cunningham:So it's like a mass incarceration response almost?Anna Aizer:Yeah.Scott Cunningham:Capacity constraints.Anna Aizer:They were at capacity, so they needed to do something. So what this program was, it was an intensive supervision program. The kids had to come in at least twice a week and meet with a counselor. The counselor would provide counseling services and also check in on them, make sure they were going to school or working or getting their GED. And then they would write up these long reports.Anna Aizer:I only worked in the courts, so I wasn't doing any of the counseling myself. I had no qualifications to do that. I worked in the courts, so my job was to screen kids for eligibility for the program, interview them, see if they were good candidates. Then talk to their families, talk to their lawyers. And then talk to the judge eventually about the program and about what we would be doing and why we thought this person was a good candidate. And then once they were in the program, I would then provide updates or reports back to the judge and the defense attorney to let them know how the individual was doing.Scott Cunningham:And wait. What is the treatment going to be that things are doing?Anna Aizer:Again, so it was really-Scott Cunningham:It's a deferment of you're going to go to jail?Anna Aizer:Yeah. That's exactly right. It was a six month program. If they made it through after six months, they would be sentenced to probation instead of jail time.Scott Cunningham:Yeah. They would refer adjudication type concept.Anna Aizer:Exactly.Scott Cunningham:Right. Yeah.Anna Aizer:Exactly. So that was the idea.Scott Cunningham:But it's non random. And I know you're not-Anna Aizer:It was, yeah.Scott Cunningham:You're not thinking about the future Anna Aizer [inaudible 00:21:17], but it's not random.Anna Aizer:No.Scott Cunningham:What is it conditioned on? Because you're doing all of it, right?Anna Aizer:Right. Right. So you look at a kid's record. You would look at whether or not the kid seem to have support. The downside was if a kid didn't make it through the program they might be sentenced to more time-Scott Cunningham:Really?Anna Aizer:than they would have... Maybe. I mean, the judge would-Scott Cunningham:Why? Because you're getting a new judge or something?Anna Aizer:No, it's the same judge. But the judges say, "Look, I'm going to give you a chance. Instead of sending you away now for six to 18, I'm going to give you an opportunity to prove yourself. Six months, stay out of trouble, complete this program. And then I'm going to send you to probation. But if you don't complete the program, I'm going to sentence you more." In the end, they might not have actually done that. They certainly didn't tie their hands in any way.Scott Cunningham:What do they doing? Why are they doing that? Why is a judge doing that? They're trying to deal with some sort of adverse selection or something? They don't want people to-Anna Aizer:They want to create an incentive for the kid to-Scott Cunningham:They're trying to create an incentive for the kid. Got it. Okay.Anna Aizer:Yeah. They-Scott Cunningham:Like a little scared straight thing?Anna Aizer:A little. I mean, the judges always think that. It's not clear that that works. I don't think that really matters so much in the decision making of young people. I think it's-Scott Cunningham:Yeah. Totally. Totally.Anna Aizer:But that certainly was on the mind I think of many of the judges.Scott Cunningham:It's funny though. When I think about this paper that we're going to talk about a little bit, it's like you're already aware of, oh, these judges have a little bit of discretion. They're saying a bunch of stuff that's not in the law. "If you don't do this, I'm going to give you penalize, I'm going to give you really bad grade at the end with another year in prison." Did that cross your mind that you were noticing that judges were... This judge does that and this other judge does not tend to do that, is that something you could have noticed?Anna Aizer:Absolutely.Scott Cunningham:Oh, wow.Anna Aizer:Yeah. So there were many, many judges. So this is Manhattan. This is the main criminal courts in Manhattan, so I had many, many judges, a lot of people. The way it works is once you've been indicted on a felony you come before one of these three judges. They're called conference judges. They try to dispose of the case. Either the case gets dismissed or they take the plea deal. But if that doesn't happen, they reach into a bin, literally a lottery-Scott Cunningham:It's like a bingo ball machine?Anna Aizer:It's a lottery with all these different judges' courtrooms. They pull out a number, and that's the number of the courtroom you get assigned to. You know right then if you get assigned to certain judges, for sure that kid is going to do jail time. And if you get assigned to other judges, for sure that kid is going to get probation.Scott Cunningham:Who knows this? The kids don't.Anna Aizer:The kids don't, but they don't know it.Scott Cunningham:They can't comprehend.Anna Aizer:But their attorney will know it.Scott Cunningham:And then maybe their parents.Anna Aizer:No, I don't think their parents would know.Scott Cunningham:Although, who in a group of kids that maybe their parents aren't as-Anna Aizer:I don't think their parents would know it, either. You would know it because you have to remember that all of the judges for the most part were either defense attorneys or prosecutors before they were judges, and you can tell. The judges who would-Scott Cunningham:Is that the main source of the discretion that you notice?Anna Aizer:I think so. I think so. I think the judges who previously prosecute-Scott Cunningham:I mean, they're such different. It does seem like the prosecutors and the defense attorneys are almost cut from a completely different worldview and set of values.Anna Aizer:I think that's right.Scott Cunningham:I had this friend that was a public defender in Athens and he was like... I think this is what he said. I'm not going to say his name because he probably didn't say this, but I thought he basically said, "I don't like prosecutors because they think they are always guilty."Anna Aizer:Yeah.Scott Cunningham:And you could tell. The public defender, they were like, "My whole job is to not do that." I could just imagine that shaping... Either there's a lot of selection into that or that just really... You hear that all the time. There's got to be human capital with that.Anna Aizer:Yeah. I agree. I think they have a different perspective, which is what draws them to either defense work or prosecutorial work. But then you have to remember their jobs are really very different. So the prosecutor he or she is just dealing with the victims, so that's who they're talking to all day. The defense attorney is talking to the defendant and getting to know them and their families. They really just have very different sympathies. And the judges come from one or the other.Scott Cunningham:One or the other.Anna Aizer:So you can see it.Scott Cunningham:So you're a kid, you're young person. What are you feeling over the course of working with this? Tell me a little bit about your growth and the thoughts that you're thinking about.Anna Aizer:Yeah. I really felt like these were kids that just got derailed, that these were kids, they were in a very tough situation. They made a decision and they had no idea what the consequences of that were going to be. Nor should they have. They were 16. It's very hard to know where these things end up. I did feel as though the criminal justice system was way too harsh.Scott Cunningham:You could tell. Because the whole point of this nonprofit you're working on is a response to such an excessive amount of penalization. They literally don't have any room.Anna Aizer:Yeah.Scott Cunningham:Yeah. They don't have any room for anybody.Anna Aizer:Yeah. They had no room. That's exactly right.Scott Cunningham:We're doing so much punishment we can't even do it right.Anna Aizer:That's exactly right. In the juvenile and criminal justice system, more generally, there's a disproportionate involvement of Black and Hispanic youth.Scott Cunningham:Yeah.Anna Aizer:But they are 100% poor.Scott Cunningham:Yeah. Right.Anna Aizer:So that's the other thing. And that just seemed incredibly unfair to me.Scott Cunningham:Yeah, yeah, yeah. Right.Anna Aizer:And it's not the case that not poor kids don't also mess up. They do.Scott Cunningham:They just can avoid the 10,000... There's 10,000 events from the mess up to the things that these kids are facing in this program that they have many ways of mitigating it.Anna Aizer:Yeah. That's right.Scott Cunningham:There's even in terms of parents spending a ton of money, or just saying you can't hang out with these people. There's a bunch of stuff that poor families just are like... So you're feeling heavyhearted.Anna Aizer:Yeah.Scott Cunningham:You could have gone in a different direction. You could have not gone to graduate school or gone to get this master's. What's the decision criteria where you're thinking I've got to go in a new direction?Anna Aizer:Yeah. At a certain point I just felt as though I needed more training. I wanted more of a professional degree, so I got a degree in public health where you learned a lot about the health system and financing and the social determinants of health. I felt like I needed, again, more training. I should say, I went from that job, not directly back to graduate school, but I went and I worked in not a homeless shelter, but a service center for homeless people also in New York City. I went from the criminal justice system to the homeless system. I was there for another year. And then I went back to school.Scott Cunningham:To what, two or three years total between Amherst and graduate school?Anna Aizer:That's correct. Yeah.Scott Cunningham:Yeah.Anna Aizer:That's correct.Scott Cunningham:It's interesting you go to public health because I think a lot of people that don't know anything about anything, they'll be like, well, she's doing criminal justice so I could have seen her going to law school. Now she's going to the homeless thing. Okay, well, maybe she could do social work. What were the things you were thinking of? And how did you end up choosing public health? Because a lot of people don't associate either of those things with public health. They heard the word health.Anna Aizer:Right. So a couple things. One, I thought about law school, but I felt as though lawyers deal with the problem after it's happened.Scott Cunningham:Right.Anna Aizer:And I felt like maybe we should focus more on preventing.Scott Cunningham:Right.Anna Aizer:And the other thing, when I worked with homeless people I really did start to feel like this was a homeless individuals... Homeless families are different. I worked with homeless single adults, and for the most part in New York City at that time, all of the homeless single adults had serious mental health problems.Scott Cunningham:Yeah. Right.Anna Aizer:I really came to see homelessness as a public health problem.Scott Cunningham:A mental health problem.Anna Aizer:Yeah.Scott Cunningham:They hit public health. Got it.Anna Aizer:Yeah.Scott Cunningham:Right. Right.Anna Aizer:So that's really how... I could have done social work, but that's not really what I wanted to do.Scott Cunningham:Yeah. But it's funny you say preventative. To me when I hear that I'm thinking, oh, Anna's already starting to think about public policy.Anna Aizer:Yeah. I think I was.Scott Cunningham:I wouldn't necessarily think that if you were to tell me you went and got a master's in social work.Anna Aizer:Yeah. No, I think that's [inaudible 00:31:54]-Scott Cunningham:Because that cold be clinical or much more working with the... You would've had that experience and you'd be like, I want to work with these families. But that's not what you thought, so something else is going on. So you're thinking I want to do what?Anna Aizer:Yeah. I think I really was interested in policy already then.Scott Cunningham:Yeah. And that makes the masters of public health make a lot of sense.Anna Aizer:Correct. Yeah.Scott Cunningham:I see. So where'd you end up going, Harvard?Anna Aizer:I went to Harvard. Yeah. I got a masters in health policy and administration. And then I moved to DC. I worked for Mathematica policy research for two years, and I learned a lot about policy research.Scott Cunningham:Are you getting a quantitative training at the master's of public health when you went?Anna Aizer:Yeah, so that's where I really took my first micro theory class and my first statistics class. So I took biostatistics and micro theory there. And when I worked at Mathematica, I worked with a lot of economists. So most of the senior researchers at Mathematica were economists by training. That's where I really got exposure to the way economists think about, research and policy evaluation. It was then that I decided I wanted to go back and get a PhD in economics.Scott Cunningham:Okay. So what was it? What's the deal? Why do you like economics at this point?Anna Aizer:The senior researchers at Mathematica were either economists or sociologists or political scientists. I just felt like the economists had a very clear way in which they set up problems. I think that goes back to economic models of decision making.Scott Cunningham:Yeah. Right.Anna Aizer:And it just struck me that that was just a very good way to conceptualize almost any problem. I also liked the way they thought about data. I think the people that I worked most closely with and came to admire were all economists. So that's how that-Scott Cunningham:And how long were you there? Were you doing public policy stuff at Mathematica?Anna Aizer:Yeah. I was doing a lot of evaluations of Medicaid programs. In particular, Medicaid managed care, moving from a different financing model for Medicaid and evaluating that, and various settings, and writing them policy briefs so that... God. It was either two or three years, I can't really remember, maybe three years. I think I was there three years and then I went back to graduate school.Scott Cunningham:And then you go to UCLA?Anna Aizer:And then I went to UCLA.Scott Cunningham:Am I right that you were working mainly with Janet Curry?Anna Aizer:Yes. So Janet Curry was my-Scott Cunningham:You worked pretty closely with her?Anna Aizer:Yeah. She was my main advisor. The other folks I worked with were Joe Huts and Jeff Grogger.Scott Cunningham:And who?Anna Aizer:Jeff Grogger.Scott Cunningham:Oh, Jeff Grogger?Anna Aizer:None of whom are there anymore.Scott Cunningham:Yeah, yeah, yeah, yeah. Right. Right. I'm just curious. I associate you a lot with... Because I wrote that book on causal inference I'm obsessed with the causal inference stuff in all these weird ways, with all the people. I see Princeton industrial relations section, Card, Angres, et cetera. And then I see Janet Curry. And then I see you at UCLA, and I associate you so much with that methodological approach, especially for some of the papers that I've known really well. Did you get a sense when you were at UCLA, oh, this is causal inference, this is different, this is the credibility revolution? Or was it just really subtle, or this is just how you do empirical work?Anna Aizer:That's a great question. So I should also say that my first year econometrics teacher was Hero Inmans.Scott Cunningham:Was it, really?Anna Aizer:Yeah. Hero [inaudible 00:36:18] UCLA.Scott Cunningham:Oh my gosh. I didn't know that.Anna Aizer:For a short period of time. I was lucky enough that he was there when I was there. So he taught me in my first and my second years. So of course he was very much big part of this. And actually Enrico Moretti was also at UCLA when I was there, so I took courses with him. I think between Janet, Hero, Enrico and Joe Huts, they were really in the thick of it. That was the way it was done.Scott Cunningham:That was the way it was done.Anna Aizer:That was the way it was done.Scott Cunningham:Yeah. What did you learn? What do you think the salient concepts were that had you... This is a make believe, right? But I'm just saying, had you gone to a different school where you didn't have any of those people, what do you think the salient econometric causal inference kind of things were to you that you were like, oh, this is what I notice I keep doing over and over again, or keep thinking about?Anna Aizer:Well, I would say that the method was in service to the question. I feel as though I'm seeing it more these days. People, they find an experiment, a natural experiment, and then they figure out the question. That's not how I remember it. You had the question and then the method was in service to that question. I worry that that's getting a little bit lost these days, that people have the experiment and then they're searching for the question. I think that ends up being less interesting and less important.Scott Cunningham:Yeah, yeah, yeah. Yeah. There were certain economists, I think, that were so successful as approaching it that way. It seems like it was cut both ways, because it seems like applied causal inference grew on the back of that kind of natural experiment first, but it almost becomes... To a kid with a hammer, everything's a nail, so it's just like, look through the newspaper, look for a natural experiment. What can I do? How can I do this? How can I [handle 00:38:49]?Scott Cunningham:And it is funny. I don't think it's as satisfying too, just even emotionally. I guess you can find discoveries that way, like you were, but it does feel like you don't end up building up all the human capital with the importance of that question. It's almost like, you're like, well, how can I make this question really important? As opposed to it is important.Anna Aizer:Right.Scott Cunningham:What were you studying? I know what you were studying. At UCLA, what was the question that you were really captivated by?Anna Aizer:So I was really focused on health. You have to remember, I'd done a master's in public health and I just worked at Mathematica, so I was really focused on health. So really all of my dissertation was on health. My main dissertation chapter was actually on Medicaid in California. It was on the importance of enrolling kids early in Medicaids. I don't know if you know much about the Medicaid program, but there are many kids, 60% of kids, who are uninsured are actually eligible for the Medicaid program, but not enrolled in the Medicaid program. And that's partly because-Scott Cunningham:60%?Anna Aizer:Yeah.Scott Cunningham:Wow.Anna Aizer:We could reduce the number of kids who are uninsured in this country by more than half if you just enrolled all those kids who were eligible for Medicaid in the program.Scott Cunningham:Yeah.Anna Aizer:And part of the-Scott Cunningham:We saw that in that Oregon Medicaid experiment.Anna Aizer:Yeah. Oregon was mostly adults. I don't know how these numbers differ for adults and kids. I'm really more focused on kids. It's partly by design because Medicaid is a program. If you show up at the hospital and you don't have insurance and you're eligible for Medicaid, the hospital will enroll you. And most people know that.Scott Cunningham:Oh, is that right?Anna Aizer:Yeah. I mean, because they have every interest. They want to get paid, so they'll enroll you in the Medicaid program, but there's a cost to that. Because what that means is that kids, if parents know that once they go to the hospital their kid will be enrolled in the Medicaid program should they need hospitalization, they don't end up getting them enrolled prior to that. So they miss out on the ambulatory preventative care that might prevent them from being hospitalized to begin with. And that's partly because of the structure of the program, but that's also because the states made it difficult for kids to enroll in the Medicaid program. In California, there was a big change. The application for Medicaid used to be 20 pages long. Imagine that, right? They cut it down to four.Scott Cunningham:What kind of stuff are they asking on those 20 pages?Anna Aizer:Who knows? Who knows what they're asking.Scott Cunningham:Good grief. I mean, they're wanting them on there. Are they screening them out or are they just-Anna Aizer:I think that's partly what they were trying to do, right?Scott Cunningham:Screen them out? Because it's expensive.Anna Aizer:It's expensive.Scott Cunningham:You've got some of these legislators, they're like, this is expensive and I don't even want to do this so add a dozen pages.Anna Aizer:Yeah. So just make it hard. Now, what happened in '97 was the child health insurance program, CHIP. And they said, "If you want CHIP money..." So that's federal money to ensure more kids. "If you want CHIP money, federal money, you are going to have to enroll more kids in the Medicaid program. You have to do outreach." So the states actually were forced, and that's actually what prompted California to go from a 20 page application to a four page application. They also spent about $20 million on advertisement and basically training community based organizations in how to complete a Medicaid application. So they train them. "Here, you can help your clients enroll in Medicaid. For every application that you help that ends up getting onto the Medicaid program we'll give you 50 bucks." And this really mattered. A lot of kids started enrolling in the Medicaid program who otherwise wouldn't, particularly Hispanic and Asian American kids.Scott Cunningham:Is this what your dissertation ends up being about?Anna Aizer:This is what my dissertation is about.Scott Cunningham:On both the shortening and the payment?Anna Aizer:So it was basically once they started doing this you started seeing big increases in the number of kids who were enrolled in the Medicaid program. And you saw declines in hospitalizations for things like asthma. Asthma is a condition for which if you're being seen and treated on an ambulatory basis, you shouldn't end up in the hospital.Scott Cunningham:Oh. Wait. So what's your control group and all this stuff?Anna Aizer:What the state did was they targeted different areas, and provided training to those community based organizations in how to complete a Medicaid application. So they gave me all that data.Scott Cunningham:Get out of here.Anna Aizer:So I had all the data.Scott Cunningham:So you're doing some IB thing? You're doing some-Anna Aizer:Yeah. It was, basically if you live in a neighborhood where a community based organization had already been trained then you were much more likely to be enrolled in the Medicaid program. So you can see that.Scott Cunningham:Oh my gosh. This is so cool. Were you excited when you found that?Anna Aizer:I was super excited.Scott Cunningham:I bet.Anna Aizer:I was super excited. This was so old. I was begging Medicaid to send me this data. Begging, begging, begging. And they weren't really answering. And then one day Janet came in to the office where all the graduate students sit, and she said, "I think I got this fax for you." She handed this 20 page fax that has all the data on what community organization got trained and when.Scott Cunningham:Okay. Anna, I want to ask a meta question real quick. You just said, these days people maybe start with natural experiment first, but originally it was question first. Okay. Not devil's advocate, but just a statement of facts. The one reason they may do that is because when you find these kinds of natural experiments or whatever, it almost just feels almost itself random. You're weren't even really looking for it. You read something in the newspaper, you're like, oh my gosh, they're doing this weird thing. And the risk of going question first is, you could have this incredibly important question, like the Medicaid project payment thing, and you're like, if everybody in my department, like Hero Inmans and Moretti and Curry, who are to answer a question either subtly or not so subtly, or to answer a question is going to require this credible design and we really need you to staple this dissertation together. You're going to have to have a-Anna Aizer:I think that's why you have lots-Scott Cunningham:It seems really risky. It seems really risky.Anna Aizer:Yeah. I think you have to have lots of ideas.Scott Cunningham:You have to have lots of ideas.Anna Aizer:I think you have lots of ideas. A good friend of mine in graduate school was Enrico Moretti's RA. He told me that Enrico had tons of ideas. Wes, this was my friend, his RA, would just do some really quick takes on all of these ideas. And if there was something there he'd pursue it. But if there was nothing there he'd drop it.Scott Cunningham:What does that mean, nothing there, something there? What does that mean?Anna Aizer:Either, if you can't find exaggerate variation or the exaggerate variation doesn't actually work, you don't have the first stage, he'd just drop it and move on to something else.Scott Cunningham:That's a skill. That's almost some therapeutic skill to be excited about something and willing to let it go.Anna Aizer:Yeah. I think that's right. I think that's actually-Scott Cunningham:You got a lot of ideas?Anna Aizer:I had a lot of ideas. It never worked out.Scott Cunningham:Never worked out. And that's normal.Anna Aizer:I think that's normal.Scott Cunningham:Yeah. That's not a bad thing.Anna Aizer:Yeah. I think that's how research should go. In fact, I'm not as good as Enrico, I probably hold on to things for longer than I should.Scott Cunningham:Yeah, yeah, yeah, yeah. Boy, where'd you end up publishing that work? I should know this, but I don't know.Anna Aizer:That published in Restat Review Economics Institute.Scott Cunningham:Oh, cool. So what'd you end up finding?Anna Aizer:So what I end up finding is if you pay these organizations to enroll... Well, a couple things. Advertisement, just blanketing the television and radio with information. Sign up for Medicaid, sign up for CHIP, that does not work at all.Scott Cunningham:Doesn't work?Anna Aizer:No.Scott Cunningham:Advertising doesn't work?Anna Aizer:It doesn't work. What works is having these communities organizations help families complete the application. That's incredibly important.Scott Cunningham:That's a supply demand kind of philosophy that you see in drugs, too. Mark Anderson has this paper on meth. They would post these advertisements of people that were addicted to meth. They look horrible. They lose their teeth and all this stuff. It didn't do anything.Anna Aizer:Yeah.Scott Cunningham:Maybe I'm wrong, but it seems like you're talking about a group of people. They're like, they need more assistance. They need somebody... You think about that thing you were saying earlier about these kids that are higher income versus lower income. When I said there were 10,000 steps that the higher income people had, it wasn't really like the kids, it was external forces that were investing, going after them.Anna Aizer:Yeah. Right.Scott Cunningham:It seems like incentives need to be targeted to people to go after. For whatever reason it is not enough to just simply have it. You need people going in and helping along the way.Anna Aizer:Right. Agreed. I agree. They need support.Scott Cunningham:They need support.Anna Aizer:Yeah.Scott Cunningham:Okay. So that is amazing. I bet your advisors were so proud of you for that project.Anna Aizer:I don't know.Scott Cunningham:I think so.Anna Aizer:You'd hope so, but that'll be icing on the cake.Scott Cunningham:Right. Exactly. Yeah. I guess that's not super important.Anna Aizer:Yeah, it is. You do always want your advisor... I mean, I had tremendous respect for all my advisors. So yeah, I'd be very pleased if they liked the work that I did. Basically, states did spend this money to enroll kids early, but it paid off because it meant that they were less likely to be hospitalized. In fact, some of these programs can be very much cost effective.Scott Cunningham:Yeah. Yeah. I had told myself, I was like, well, I'm asking Anna about the juvenile incarceration paper with Joe Doyle. And then I was going to ask her about domestic violence. And I feel like I've got to make a hard choice now, because I don't have a lot of time. So I was thinking, well, let's see how this goes. And then we can fit. So domestic violence. First thing I want to ask is, how did you get interested in that topic? And when did it start? In a way I could almost imagine, oh, you've been thinking about domestic violence forever.Anna Aizer:Yes. So I actually-Scott Cunningham:You've been thinking about women ever since college.Anna Aizer:Yeah. That's true. And made that connection. This was basically my first big project after I started at Brown. After my dissertation I was thinking, okay, what's my next big project going to be? And I think that's a very important decision for junior faculty to think about. After you finish publishing your dissertation you got to think about what's my next big project? Because it takes so long to publish anything in economics, that's really going to matter a lot. That might be the only thing you publish before you're coming up for tenure given how long.Anna Aizer:I was thinking about it, and I just felt like I didn't have a clear question in mind, but just been looking at the numbers it's incredibly prevalent, domestic violence. But it's also shown some pretty encouraging trends. Domestic violence against women has been declining pretty significantly. In the US, I think about... I haven't looked the number up recently, but it was about 1,000 women a year were being killed, and so many more actually are victims of domestic violence. And if you look at victimization surveys, between one and three and one in four women in the US report ever being the victim of domestic violence. It's really prevalent. And it just struck me, this is a big problem and I don't know how to answer it, but we should know more about it given just how prevalent it is. And so that's how I started.Anna Aizer:I have a good friend from high school, and she's a lawyer in New York City. She was working with victims of domestic violence. She's a lawyer by training. She used to say, "These women have nothing. They have no resources. They are so poor." That, to me, just made me think about, okay, I need to start thinking about income and resources and poverty and domestic violence, because clearly that's a big part of this.Scott Cunningham:Yeah. Yeah. It's so funny. I feel like you and I ended up responding to the bargaining theory papers in the exact same way. That's when I was studying a lot of my stuff on couples and things and bad behavior on the part of the men, I was always thinking about sex ratios in the marriage market. Why I was thinking about that was the ability to exit the partnership could be really, really important. And I was curious. You can talk about people not having resources and not necessarily be thinking in terms of one of these Nash bargaining, like Manser and Brown, and McElroy and Horn, and Shelly Lundberg kinds of ways of thinking. I was curious, were you thinking about those theory papers a lot? Or am I just projecting?Anna Aizer:I had this friend, again, who was working and telling me just how poor many of the women she was working with were. And then once you actually look at the statistics, the survey statistics, it's true that any woman can be a victim of domestic violence, but it is really a poor woman problem. So it's very clear to me that poverty has a lot to do with it. It's because many of these women have no other source of support. They have low levels was in schooling. They have few prospects in the labor market. And they're really stuck. That is ultimately-Scott Cunningham:Stuck as in cannot leave.Anna Aizer:Cannot leave. I mean, they have a very-Scott Cunningham:Because that's the solution. That's one of the most important solutions, which is probably you need to leave the relationship.Anna Aizer:Yeah. Or you need to be able to threaten to leave.Scott Cunningham:You need to be able to threaten to leave. How important do you think the credible threat is? Because my sense is, that's to an economist, because they're like, you should thinking about unions and stuff. They're like, oh, credible threats. That's all you got to, you have to do it. I feel like, I don't know if that really works. I actually think the truth is you're going to have to leave. And maybe there's some marginal guy. We're talking about the marginal guy, but whatever, that's the info marginal, whatever. The extensive marginal guy, he's got narcissism personality disorder, substance abuse problems.Anna Aizer:Yeah. You may be right.Scott Cunningham:He's got major, major problems. And that stuff is very inelastic to everything.Anna Aizer:Yeah. You may be right. I can't answer this because I don't know for sure. At the same time I remember talking to some folks about this, and their feeling was that it's all a continuum of a bad relationship. Violence may be one extreme, but relationships have ebbs and flows. They can be better at some points and worse at others. So they did feel as though a relationship didn't always have to be violent, that you could have relationships that were violent at one point but then were no longer. Of course, you also have relationships in which that's not the case, and the only solution is to leave. But there could very well be relationships where you can have better and worse periods.Scott Cunningham:Yeah. The reason why I bring it up is because I feel like these days you hear a lot about mental health. Well, you hear about mental health period, but in domestic violence there'll be also an emerging story of the narcissist personality disorder. I've been always lately thinking, I've been like, I wonder if this is true. Anecdotally, what you see a lot is how manipulative... And that's like a very judgemental way of putting it, but I don't know how else to say it. How manipulative one of the person can be towards the other where they're like, "Well, if you loved me..." They get all this trepped up stories about love. What love becoming almost this story.Scott Cunningham:I've wondered for those people that can't or won't... It's actually won't, right? They can leave. I mean, there are some people they will be literally harmed if they leave, so I'm not talking about those people. But I mean, the person that literally you're watching an equilibrium where they don't leave, I've wondered lately if it's like, the victim is all tangled up with loyalty and love.Anna Aizer:Yeah. Sure.Scott Cunningham:And it is taken advantage of by a person that no one can tell them not to love this person. That's nobody's business.Anna Aizer:Yeah. Yeah. I mean, it is a really complicated thing.Scott Cunningham:It is so complicated. It is so complicated. Finding the policies that provide resources to a person. Some of that might be a person that's at those earlier ebbs too, those earlier ebbs in the bad relationship. And you're like, well, some people may not be ready to leave yet.Anna Aizer:I mean, this a thing where I do think the right policy response is providing resources to women, but also probably interventions aimed at the assailant is probably going to be just as effective. Sorry. My phone is ringing.Scott Cunningham:That's okay.Anna Aizer:Hello. Sorry about that. I thought it might be my kids.Scott Cunningham:I wonder about these battery courts. Have you heard about these [inaudible 01:00:05] courts?Anna Aizer:Yeah. I mean, they're-Scott Cunningham:I wonder what you know about those?Anna Aizer:Yeah. Not a lot, I would say.Scott Cunningham:Yeah. These issues of poverty and mental health and all of these things interacting in order to get healing and healthy meaningful lives to all everyone is... I do think this is something that economists can offer, but it's not something that... I wouldn't say there's a ton of people. You're one of a small number of people working on domestic violence, it seems like.Anna Aizer:It's a very hard thing to study. Data's very difficult to come by for obvious reasons, for a good reason. I mean, this is data that needs to be protected. Glenn Ludwig and the crime lab in Chicago, they're doing work around violence reduction more generally. And probably many of those principles and findings probably relate to domestic violence as well, changing the behavior of young people so that they are less quick to react and less quick to react in a violent way. When they do, we would probably have some pretty important spillover to domestic violence as well, I think.Scott Cunningham:Yeah. Yeah, yeah.Anna Aizer:I think there are ways to reduce violence more generally that would probably apply to the setting of domestic violence.Scott Cunningham:Yeah. It's funny, circling back to that judge who threatens with higher penalties. I think economists, when they think about violence and things like that, you're an exception for thinking about outside options and stuff like that, but the shadow of Gary Becker's deterrence hypothesis, it can just be this straight jacket for a lot of people, because they just only think in terms of relative price changes on the punishment margins. When you talk to psychologists, or you read that psychology literature about narcissism or borderline personality disorder or substance abuse, you're talking about a group of people that are, for variety of reasons, have really low discount rates or just have beliefs that things don't apply to them. Or in no uncertain terms, the elasticities of violent behavior with respect to some unknown punishment that you don't even know if it's going to real, it just seems like, we don't really know, but [inaudible 01:03:06] really big.Anna Aizer:Yeah. So there was this criminologist named Mark Kleiman. Do you know that name?Scott Cunningham:Oh yeah. Mark Kleiman. Yeah. Yeah.Anna Aizer:I mean his big thing was, it should be swift, sure and short. That's how we should do punishment. He felt as though that would be far preferable to the system in which there's uncertainty. But if it doesn't work out, you're going to spend a lot of time in jail. He thought that was a fair model.Scott Cunningham:The thing is, though, swift certain and did you say short?Anna Aizer:Short.Scott Cunningham:Yeah. Well, with prison sentences lingering on your record it is by definition never short.Anna Aizer:Yeah.Scott Cunningham:You face these labor market scarrings and you can't get housing, you can't get jobs and that does not go away. So even if the prison sentence is short, the person... I just feel like this is the tension around violence in the country, which is punishment has so many margins where it is permanent. It's got so many margins. And just being in a cage is only one of them.Anna Aizer:Yeah. I mean, particularly for young people, jail is incredibly scarring.Scott Cunningham:Incredibly scarring. Incredibly scarring. We've been studying suicide attempts in the jail and we-Anna Aizer:Yes, that's right.Scott Cunningham:We walked the jail for this one particular jail. I have never in my life seen anything like that. I've been working on this project for four years. I hadn't walked to the jail. I don't know. It's not the first thing that came to my mind. The team finally walked the jail. I spent the whole day there. The jails have so much mental illness in it. They just are in... It's not even cages. A cage has... Air gets in. It's a sealed box. It's like Houdini's box. They stay there, and for a variety of regulatory reasons and so forth, they stay in there. Can't have a lot of materials if they are at risk. If they've come in with psychosis because of substance abuse or underlying mental illness stuff, they might get moved into certain types of physical quarters. I just can't even imagine, just in an hour, let alone... And that's just jail. That's not even prison. It's just absolutely a trauma box.Scott Cunningham:Unfortunately, we didn't get to talk about your paper with Joe Doyle on the juvenile incarceration. But every time I teach that juvenile incarceration paper, where kids were incarcerated as a young person, and then end up not going back. It's not even the future prison part, it's the not going back to high school.Anna Aizer:Oh, of course.Scott Cunningham:And then when they go back, they're labeled with a behavioral emotional disorder. It's really like anybody that's had any exposure to a kid involved in corrections, you're like, oh, I know exactly what that is. They were traumatized. You don't even have to come up with some exotic economic theory. They were traumatized. That's why they come back to school with a behavioral emotional disorder. It is [inaudible 01:06:59].Anna Aizer:Yep. That's good.Scott Cunningham:That paper is one of the most important papers I have personally ever read. I teach it nonstop. And I've even cried teaching it in class. I get so emotional when I get to that part, because, I don't know about you, but it seems like it's really hard not to come away with... A lot of papers you read, you're like, well, we're not really sure exactly all to make of it. But when I read that paper that you wrote, I just think, especially when you think about the leniency design, I just think these kids probably didn't need to go to prison.Anna Aizer:Oh yeah.Scott Cunningham:Honestly, what else are you going to say? They end up committing more crimes. And they are not going back to school. How was this the policy goal? What was it like writing that paper when you started to realize what was going on?Anna Aizer:Again, when I worked in this Alternative to Incarceration program we had kids come into the program who had spent some time in jail. And we had kids who had spent very little time, maybe just a night. The kids who had spent even just three weeks in jail, they always did worse in the program. Always. It was a known fact. The program knew it. And the question was, well, are these kids somehow different? There was a reason why they were in jail and these other kids weren't. Is that why they do worse in the program? Maybe they're in jail because their family didn't show up for them in court. They couldn't make bail.Anna Aizer:Or was it something about spending three weeks in jail that just made it impossible for them to complete the program? This was a big question that was on everybody's mind. We talked about this quite a bit at the program, and we didn't know the answer. When I finally figured out how to do it, working with Joe, I wanted to know the answer to a question that I had been thinking about for over a decade.Scott Cunningham:Gosh. Were you emotionally upset when you started to see coefficients get really big?Anna Aizer:It really was not surprising. It really wasn't, because these are kids who are only marginally attached to school. These are not the kids who were going to school, doing well in school. These are kids who were not really that attached to school for whatever reason. So you take them out even for a month, they're not going to go back. I mean, it's obvious. We saw that in the program. What they ended up doing was moving a lot of kids from school to GED because they had not been involved in school, they were not involved in school. It just was much more likely that they would be able to complete a GED than actually go back to high school and finish.Scott Cunningham:Your paper, it like hit home for personal reasons. We had an event happen. I wrote a professor. I was like, this thing had happened. Anna and Joe find this result. I feel hopeless. There's this kid in town and I raised money for him. Basically, I was like, you just got to do everything in your power to not let them spend an extra minute in jail. And all this scared straight stuff. Parents get into it, too. They're exhausted. They're like, "Well, he's got to learn his lesson." Nobody learns a damn thing in jail. They don't learn a lesson. Because you're just so hopeless. You start grasping at straws. And people will tell you that might happen.Scott

This week I have the pleasure of introducing Dr. Anna Aizer, professor of economics at Brown University and editor-in-chief at the Journal of Human Resources. I am a long time admirer of Dr. Aizer’s work and have followed her career with curiosity for a long time. Some of her papers imprinted pretty strongly on me. I’ll just briefly mention one.Her 2015 article in the prestigious Quarterly Journal of Economics with Joe Doyle on juvenile incarceration, for instance, has haunted me for many many years. It was the first or second paper I had seen at the time that had used the now popular “leniency design” to examine the causal effect of being incarcerated as a youth on high school completion and other outcomes as well as adult incarceration. Simply comparing those outcomes for those incarcerated and those not incarcerated as a kid will not reveal the causal effect of juvenile incarceration if juvenile incarceration suffers from selection bias on unobservable confounders. So Dr. Aizer with Joe Doyle used a clever approach to overcome that problem in which they found quasi-random variation, disconnected from the unobserved confounder, in juvenile incarceration caused by the random assignment of juvenile judges. As these judges varied in the propensity to sentence kids, they effectively utilized the judges’ own decisions as life changing lotteries which they then used to study the effect of juvenile incarceration on high school and adult incarceration. And the findings were bleak, depressing, enraging, upsetting, sad, all the emotions. They found that indeed being assigned to a more strict judge substantially raised one’s chances of being sentenced as a kid. Using linked administrative data connecting each of those kids to their Chicago Public School data as well as Cook County incarceration data, they then found that being incarcerated significantly increased the effect of committing a criminal offense as an adult, and it decreased the probability of finishing high school. The kids, best they could tell, mostly didn’t return after their juvenile incarceration, but if they did return, they were more likely to be given a emotional and behavioral disorder label in the data. My interpretation was always severe — incarceration had scarred the kids, traumatizing them, and they weren’t the same. The paper would haunt me for various personal reasons as I saw a loved one arrested and spent time in jail on numerous occasions. I would see kids in my local community who had grown up with our kids arrested and think of Dr. Aizer' and Joe Doyle’s study, concluding the most important thing I could do was bail them out. The paper was one of many events in my own life that led me to transition my research to mental illness within corrections and self harm attempts by inmates even. But there’s other personal reasons I wanted to interview Dr. Aizer. Dr. Aizer went to UCLA where she studied with Janet Currie, Adriana Lleras-Muney and Guido Imbens. Recall that when Imbens was denied tenure at Harvard, he went to UCLA. Currie, who had attended Princeton at the same time as Angrist, Imbens’ coauthor on many papers on instrumental variables in the 1990s, was an original economist focused on the family, but unlike Becker and others, brought with her that focused attention to finding variation in data that could plausibly recover causal effects. The story, in other words, of Princeton’s Industrial Relations Section and design based causal inference, going back to Orley Ashenfelter, was spreading through the profession through the placements of scholars at places like UCLA, which is where Dr. Aizer was a student. In this storyline in my head, Dr. Aizer was a type of first generation member of the credibility revolution, and I wanted to talk to her not only for her scholarly work’s influence on me, but also because I wanted to continue tracing Imbens and Angrist’s influence on the profession through UCLA. The interview, though, was warm and interesting throughout. Dr. Aizer is a bright light in the profession working on important questions in the family, poverty and public policy. For anyone interested in the hardships of our communities and neighborhoods, I highly recommend to you her work. Now let me beg for your support. Scott’s Substack and the podcast, Mixtape with Scott, are user supported. If your willingness to pay for the episodes and the explainers (I’m going to write some more I promise!), please consider becoming a subscriber! Scott's Substack is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.TranscriptScott Cunningham:In this week's episode of the Mix Tape podcast, I had the pleasure of interviewing Dr. Anna Aizer, professor of economics at Brown University in Rhode Island and editor in chief of the Journal of Human Resources. I have had a keen interest in Anna Aizer and her career and her work for a couple of reasons. Actually a lot, but here's two. First, she did her PhD at UCLA when Janet Currie was there, as well as when Guido Imbens was there. Imbens taught there after he left Harvard, for those of you that remember that interview I did with him. Recall my overarching conviction that Princeton's industrial relations section, which was where Orley Ashelfeltner, David Card, Alan Kruger, Bob Lalonde, Josh Angrist originated from, as well as Janet Currie.My conviction that this was the ground zero of design based causal inference. And that design based causal inference spread through economics, not really through econometrics, and econometrics textbooks, but really through applied people. She also worked with Adriana Lleras-Muney, who's also at UCLA now, who was a student of Rajeev Dehejia, who wrote a seminal work in economics using propensity score, who was also Josh Angrist’s student at MIT. So you can see, Anna fits my obsession with a sociological mapping out of the spread of causal inference through the applied community.But putting aside Anna as being instrumentally interesting, I am directly interested in her and her work on domestic violence and youth incarceration among other things. I've followed it super closely, teach a lot of these papers all the time, think about them even more. In this episode, we basically walked through her early life in Manhattan to her time at Amherst College, to her first jobs working in nonprofits, in areas of reform and poverty, to graduate school. We talked about her thoughts about domestic violence and poverty and crime along the way, too. And it was just a real honor and a pleasure to get to talk to her. I hope you like it as much as me. My name is Scott Cunningham and this is Mix Tape podcast. Okay. It's really great to introduce my guest this week on the podcast, Anna Aizer. Anna, thank you so much for being on the podcast.Anna Aizer:Pleasure to be here. Thanks so much for inviting me.Scott Cunningham:Before we get started, could you tell us obviously your name and your training and where you work?Anna Aizer:Sure. I'm a professor of economics at Brown University. I did my PhD at UCLA oh many years ago. Before that actually I got a masters in public health. Sorry. I have a strong public health interest and focus in a lot of my work. I'm also currently the co-director of the NBR program on children. That is a program at the NBR that is focused entirely on the economics of children and families. I'm the editor in chief of the Journal of Human Resources.Scott Cunningham:Great. It's so nice to meet in person. I've been a long time reader of your papers because you write about these topics on violence against women. There's not a lot of people in economics that do. And the way that you approach it shares a lot of my own thoughts. I'm going to talk about it later, but it's really nice to meet in person.Anna Aizer:Sure. Nice to meet you, too.Scott Cunningham:Okay. I want to break up the conversation a little bit into your life. First part, just talk about your life growing up. And then the second part, I want to talk about research stuff. So where did you grow up?Anna Aizer:I grew up in New York City.Scott Cunningham:Oh, okay.Anna Aizer:Yeah, I did.Scott Cunningham:Which, borough was it?Anna Aizer:Manhattan.Scott Cunningham:Oh, okay.Anna Aizer:Yeah. Yeah. Upper side. But when I went off to college, I went to rural Massachusetts.Scott Cunningham:Yeah.Anna Aizer:Yeah. I went to Amherst, which is a very small liberal arts college in the Berkshires. That was a very different experience for me. And believe it or not, I was not an econ major.Scott Cunningham:Oh, you weren't?Anna Aizer:In fact I was not. I only took one econ course my entire four years in college.Scott Cunningham:Oh, wow. Wait, so what'd you major in?Anna Aizer:I majored in American studies with a focus on colonial American history and literature.Scott Cunningham:Mm. On literature. Oh, that's what I majored in, too.Anna Aizer:Yeah.Scott Cunningham:Yeah, yeah, yeah. Oh, wow. So early American history. So what, was this was the 1700s or even-Anna Aizer:Yeah. So I did a lot of 17, 1800s, a lot of the New Republic period. My undergraduate thesis was actually on girls schooling in the Early Republic.Scott Cunningham:Oh wow. What was the deal with girls schooling in the Early Republic?Anna Aizer:What was the deal with the girls schooling? Well, it depends. For most of the Northeast, the focused on girls schooling was really this idea that it was a new country, they were going to have to have leaders in this new country, and someone had to educate those leaders. Someone had to educate those little boys to grow up, to go ahead and lead this country. And so the idea was, well, we had to start educating moms so that they could rear boys who could then go on to this great nation.Scott Cunningham:I see. Women's education was an input in male leadership?Anna Aizer:That's correct.Scott Cunningham:Got it. Got it. Wow. Okay. Well, that's interesting. I get that. You start educating women though, I suspect that you get more than just male leaders.Anna Aizer:I think that's right. It was an unintended consequence.Scott Cunningham:Unintended consequence. They didn't think that far ahead. Okay.Anna Aizer:Yeah. That's a very good point to make, because two women who were educated in one of the first schools dedicated to educating women so that they could go on and rear their boys to be strong leaders were Katherine Beecher, who went on to create one of the most important girls schools in Troy, New York. And Harriet Beecher Stowe of course, who wrote Uncle Tom's Cabin.Scott Cunningham:They're related?Anna Aizer:Yeah. They are sisters. They are sisters.Scott Cunningham:Oh, they're sisters.Anna Aizer:They were one of the first sets of girls who were educated in this mindset of we need leaders so let's have some educated moms. And they of course had other ideas and they went and formed schools and wrote incredibly important works of fiction that ended up playing a pretty significant role in the Civil War.Scott Cunningham:Wow. Was this the thing over in England too? Or was this just an American deal?Anna Aizer:I don't know the answer to that.Scott Cunningham:Huh. I guess they have a different production function for leaders in England where as we it's very decentralized here or something. Right?Anna Aizer:Right. So you're saying in England they already had their system of you go to Eaten, and then you go to Cambridge or Oxford. Right. I think that's probably right. So we didn't have that here.Scott Cunningham:Yeah. That's right. I mean, you're creating everything from scratch. And with such a reactionary response to England who knows what kinds of revolutionary approaches you're taking to... That's probably pretty revolutionary, right? Say we're going to teach women even though it's in order to produce male leaders, it's still thinking outside the box a little bit.Anna Aizer:Yeah. I suppose that's true. Yeah.Scott Cunningham:That's cool. How come you didn't end up in... So you end up at Amherst. As a kid in Manhattan, what were you doing? You were reading books and stuff? You were a big reader?Anna Aizer:I suppose. Yeah. I suppose so.Scott Cunningham:Is that what drew you to Amherst, a liberal arts college?Anna Aizer:I don't really know. I don't think I actually knew what I wanted until much later in life. I was an American studies major, which at the time I learned a lot. It took me a while to gravitate to economics. Once I did, it was clear that that was really the right path for me.Scott Cunningham:Yeah. One question I want to leave your kid. So your parents let you ride the subway when you were a little kid?Anna Aizer:Oh yes.Scott Cunningham:Oh gosh. I bet that was so cool.Anna Aizer:Oh yes. I grew up in New York City during the '70s and '80s, which was far more dangerous than it was today. But at that time parents had a much more hands off approach to parenting. I think I was eight years old when I started taking public transportation by myself.Scott Cunningham:Oh my gosh. There was latch key parents back then?Anna Aizer:Sure.Scott Cunningham:So you jump on the subway. Where are you going at eight years old in Manhattan?Anna Aizer:You go to school.Scott Cunningham:You're just catching the subway to go to school?Anna Aizer:Yeah.Scott Cunningham:Oh, that's so cool. I bet you had a great childhood.Anna Aizer:I have to say it was pretty good.Scott Cunningham:Oh man.Anna Aizer:I can't complain.Scott Cunningham:Yeah. I grew up in a small town in Mississippi, but it was the same kind of thing. Well, it was very different than Manhattan, but just being able to have that level of... It's all survivor bias. The other kids that are getting really neglected and abused. But those of us that made it out a lot it's like, all you have is great memories of being able to do whatever.Anna Aizer:Right. Agreed.Scott Cunningham:So you wrote this thesis. At Amherst, did everybody write a thesis? Is that real common?Anna Aizer:Most people did. I think a third of the students wrote a thesis. It was very common.Scott Cunningham:But you're gravitating towards research, though?Anna Aizer:Yeah. So it was clear that I really, really enjoyed that a lot. In fact, more recently in my economic research I have done a lot more historical work than I had done initially. So I think that training has really come in handy.Scott Cunningham:Yeah. What did you like about that project that you wrote your thesis on? What did it make-Anna Aizer:Well, it was really a lot of fun. I focused on two schools in particular. I focused on this school in Lichfield, Connecticut, and another school in Pennsylvania, a Quaker school in Westtown. I focused on those two schools because those two schools, for whatever reason, kept a lot of their records. They have really wonderful-Scott Cunningham:Oh my God. You had their records?Anna Aizer:Yeah. So you have really wonderful archives where you could just go through and read all about what they were thinking about, when they founded the schools, what the curriculum should be like. And even some of the writings of some of the students and teachers.Scott Cunningham:Oh my gosh.Anna Aizer:So it was really just a tremendous amount of fun to read all of that stuff, all that primary materials.Scott Cunningham:Oh my gosh. Wait. Did you actually have the names of the kids? Did you see their-Anna Aizer:Sure. They had all of that.Scott Cunningham:Did you have the census records and stuff?Anna Aizer:Oh, I guess you could. I mean, this was so long ago before people were doing all that cool linking, but yeah, you absolutely could.Scott Cunningham:Oh, that's so neat. I wonder where those kids ended up. What did it make you feel doing that research, that was so original and just being out there in these archives?Anna Aizer:Well, it was just amazing how much you could learn by just peeking into people's lives. It was really exciting. It was really fun. And you just felt like you were discovering something new.Scott Cunningham:Yeah, yeah, yeah, yeah. So you liked that. But that's interesting because some people would be like, oh, discovering something new. I don't even care about that. When you were discovering something new, you were like, I like this feeling.Anna Aizer:Yeah. Yeah. I really did.Scott Cunningham:Yeah.Anna Aizer:I really did.Scott Cunningham:Yeah. So what happened? So you graduate?Anna Aizer:I graduated. My first job was actually working for an Alternative To Incarceration program in New York City. So I moved back home. You have to remember, this was early mid '90s, and this was the peak in terms of crime rates in the country, and in New York City in particular. And the jails-Scott Cunningham:Before you say this, when you were growing up, did your parents... Was it like people were cognizant... I mean, now you know, oh, it was the peak because it's fallen so much, but what was the conversation like as a kid about crime?Anna Aizer:In the '90s in New York City at this time, that was really the crack cocaine epidemic, so there was a lot of talk about that. That really did dominate a lot of the media at the time. It really was a big concern.Scott Cunningham:Yeah. Yeah.Anna Aizer:As we know, the city and the state, not just in New York, but nationally, really responded with very tough on crime approach, started incarcerating a lot of people. So much so that they were really out of space in the New York City jail. So Rikers Island was at capacity, even upstate prisons were pretty full. The city, not because they were concerned that we were putting too many people in jail, which has... After the fact we know that we did put too many people in jail, that there was a cost to these incredibly high incarceration rates.Anna Aizer:At the time, the concern was that we don't have enough space, so what are we going to do? The city funded an Alternative To Incarceration program for youth. It was called the Court Employment Project. It was really focused on kids between the ages of 16 and 21 who were charged with a felony in New York state Supreme Court. And these were kids who were being charged as adults, treated as adults in the system. New York City has since raised the age of majority, but at that time it was 16. So we were focused on really younger 16 to 21. Well then, most of the kids we were working with were 16 to 18.Scott Cunningham:What kind of felonies are we talking about? Is this the drug felonies? Or is it [inaudible 00:15:51]?Anna Aizer:Yeah. So a lot of it was possession with intent to sell, selling. But also robbery, that was pretty common as well. We were only working with kids that were facing at least six months in adult prison, essentially. That was the rule for our program. Because again, our program was really focused on trying to reduce the number of people who were being detained and incarcerated for long periods of time. So we were only dealing with people who had-Scott Cunningham:Wait, real quick. So you're in your early 20s?Anna Aizer:Yeah. So I would've been about 23.Scott Cunningham:How'd you find this gig? You were just going back to New York City? Or what was the deal?Anna Aizer:Yeah. I knew I wanted to go back home. At that time, jobs were advertised in the paper, so you looked through the help wanted ads and you just sent cover letters and resumes by mail to whatever jobs appealed to you. I was interested in those jobs. I was also interested in working with public defenders, so the Legal Aid Society in New York, I applied for a number of jobs there.Scott Cunningham:Where's this coming from? What's your values exactly at this time? You're concerned about poverty or concerned about something? What's the deal?Anna Aizer:Yeah. I think I guess I already was really worried. I was really concerned about low income kids who were really... I felt already were getting derailed at very young ages in a way that I thought would be very hard for them to recover. I think that in that sense was really confirmed when I started working that these were kids who in a split minute their lives were just totally changed. So certainly in the case of things like robberies, these were often group of kids with not much to do, just getting into trouble, and it just getting too far too quick. And before they knew it, they were facing two to six years. I mean, it was just really tragic.Scott Cunningham:Yeah, yeah, yeah. Yeah. I know. Six months. You think about it, too. You're looking at these six months in the program. You start looking at six months and you think, oh, that's six months. The thing is, those things cascade, because six months with a felony record serving prison becomes de facto a cycle of repeated six months, one year, two years.Anna Aizer:Sure.Scott Cunningham:You just end up... Well, that's going to be a paper that you end up writing, so I'll hold off on that. Okay. So you end up applying, you spray the city with all these resumes. And then this thing. So what is this company? This is a nonprofit?Anna Aizer:Yep. So it's a nonprofit that had a contract with the city. They had a contract with the city. Again, they were funded really because the city could not afford to put any more people on Rikers Island.Scott Cunningham:So it's like a mass incarceration response almost?Anna Aizer:Yeah.Scott Cunningham:Capacity constraints.Anna Aizer:They were at capacity, so they needed to do something. So what this program was, it was an intensive supervision program. The kids had to come in at least twice a week and meet with a counselor. The counselor would provide counseling services and also check in on them, make sure they were going to school or working or getting their GED. And then they would write up these long reports.Anna Aizer:I only worked in the courts, so I wasn't doing any of the counseling myself. I had no qualifications to do that. I worked in the courts, so my job was to screen kids for eligibility for the program, interview them, see if they were good candidates. Then talk to their families, talk to their lawyers. And then talk to the judge eventually about the program and about what we would be doing and why we thought this person was a good candidate. And then once they were in the program, I would then provide updates or reports back to the judge and the defense attorney to let them know how the individual was doing.Scott Cunningham:And wait. What is the treatment going to be that things are doing?Anna Aizer:Again, so it was really-Scott Cunningham:It's a deferment of you're going to go to jail?Anna Aizer:Yeah. That's exactly right. It was a six month program. If they made it through after six months, they would be sentenced to probation instead of jail time.Scott Cunningham:Yeah. They would refer adjudication type concept.Anna Aizer:Exactly.Scott Cunningham:Right. Yeah.Anna Aizer:Exactly. So that was the idea.Scott Cunningham:But it's non random. And I know you're not-Anna Aizer:It was, yeah.Scott Cunningham:You're not thinking about the future Anna Aizer [inaudible 00:21:17], but it's not random.Anna Aizer:No.Scott Cunningham:What is it conditioned on? Because you're doing all of it, right?Anna Aizer:Right. Right. So you look at a kid's record. You would look at whether or not the kid seem to have support. The downside was if a kid didn't make it through the program they might be sentenced to more time-Scott Cunningham:Really?Anna Aizer:than they would have... Maybe. I mean, the judge would-Scott Cunningham:Why? Because you're getting a new judge or something?Anna Aizer:No, it's the same judge. But the judges say, "Look, I'm going to give you a chance. Instead of sending you away now for six to 18, I'm going to give you an opportunity to prove yourself. Six months, stay out of trouble, complete this program. And then I'm going to send you to probation. But if you don't complete the program, I'm going to sentence you more." In the end, they might not have actually done that. They certainly didn't tie their hands in any way.Scott Cunningham:What do they doing? Why are they doing that? Why is a judge doing that? They're trying to deal with some sort of adverse selection or something? They don't want people to-Anna Aizer:They want to create an incentive for the kid to-Scott Cunningham:They're trying to create an incentive for the kid. Got it. Okay.Anna Aizer:Yeah. They-Scott Cunningham:Like a little scared straight thing?Anna Aizer:A little. I mean, the judges always think that. It's not clear that that works. I don't think that really matters so much in the decision making of young people. I think it's-Scott Cunningham:Yeah. Totally. Totally.Anna Aizer:But that certainly was on the mind I think of many of the judges.Scott Cunningham:It's funny though. When I think about this paper that we're going to talk about a little bit, it's like you're already aware of, oh, these judges have a little bit of discretion. They're saying a bunch of stuff that's not in the law. "If you don't do this, I'm going to give you penalize, I'm going to give you really bad grade at the end with another year in prison." Did that cross your mind that you were noticing that judges were... This judge does that and this other judge does not tend to do that, is that something you could have noticed?Anna Aizer:Absolutely.Scott Cunningham:Oh, wow.Anna Aizer:Yeah. So there were many, many judges. So this is Manhattan. This is the main criminal courts in Manhattan, so I had many, many judges, a lot of people. The way it works is once you've been indicted on a felony you come before one of these three judges. They're called conference judges. They try to dispose of the case. Either the case gets dismissed or they take the plea deal. But if that doesn't happen, they reach into a bin, literally a lottery-Scott Cunningham:It's like a bingo ball machine?Anna Aizer:It's a lottery with all these different judges' courtrooms. They pull out a number, and that's the number of the courtroom you get assigned to. You know right then if you get assigned to certain judges, for sure that kid is going to do jail time. And if you get assigned to other judges, for sure that kid is going to get probation.Scott Cunningham:Who knows this? The kids don't.Anna Aizer:The kids don't, but they don't know it.Scott Cunningham:They can't comprehend.Anna Aizer:But their attorney will know it.Scott Cunningham:And then maybe their parents.Anna Aizer:No, I don't think their parents would know.Scott Cunningham:Although, who in a group of kids that maybe their parents aren't as-Anna Aizer:I don't think their parents would know it, either. You would know it because you have to remember that all of the judges for the most part were either defense attorneys or prosecutors before they were judges, and you can tell. The judges who would-Scott Cunningham:Is that the main source of the discretion that you notice?Anna Aizer:I think so. I think so. I think the judges who previously prosecute-Scott Cunningham:I mean, they're such different. It does seem like the prosecutors and the defense attorneys are almost cut from a completely different worldview and set of values.Anna Aizer:I think that's right.Scott Cunningham:I had this friend that was a public defender in Athens and he was like... I think this is what he said. I'm not going to say his name because he probably didn't say this, but I thought he basically said, "I don't like prosecutors because they think they are always guilty."Anna Aizer:Yeah.Scott Cunningham:And you could tell. The public defender, they were like, "My whole job is to not do that." I could just imagine that shaping... Either there's a lot of selection into that or that just really... You hear that all the time. There's got to be human capital with that.Anna Aizer:Yeah. I agree. I think they have a different perspective, which is what draws them to either defense work or prosecutorial work. But then you have to remember their jobs are really very different. So the prosecutor he or she is just dealing with the victims, so that's who they're talking to all day. The defense attorney is talking to the defendant and getting to know them and their families. They really just have very different sympathies. And the judges come from one or the other.Scott Cunningham:One or the other.Anna Aizer:So you can see it.Scott Cunningham:So you're a kid, you're young person. What are you feeling over the course of working with this? Tell me a little bit about your growth and the thoughts that you're thinking about.Anna Aizer:Yeah. I really felt like these were kids that just got derailed, that these were kids, they were in a very tough situation. They made a decision and they had no idea what the consequences of that were going to be. Nor should they have. They were 16. It's very hard to know where these things end up. I did feel as though the criminal justice system was way too harsh.Scott Cunningham:You could tell. Because the whole point of this nonprofit you're working on is a response to such an excessive amount of penalization. They literally don't have any room.Anna Aizer:Yeah.Scott Cunningham:Yeah. They don't have any room for anybody.Anna Aizer:Yeah. They had no room. That's exactly right.Scott Cunningham:We're doing so much punishment we can't even do it right.Anna Aizer:That's exactly right. In the juvenile and criminal justice system, more generally, there's a disproportionate involvement of Black and Hispanic youth.Scott Cunningham:Yeah.Anna Aizer:But they are 100% poor.Scott Cunningham:Yeah. Right.Anna Aizer:So that's the other thing. And that just seemed incredibly unfair to me.Scott Cunningham:Yeah, yeah, yeah. Right.Anna Aizer:And it's not the case that not poor kids don't also mess up. They do.Scott Cunningham:They just can avoid the 10,000... There's 10,000 events from the mess up to the things that these kids are facing in this program that they have many ways of mitigating it.Anna Aizer:Yeah. That's right.Scott Cunningham:There's even in terms of parents spending a ton of money, or just saying you can't hang out with these people. There's a bunch of stuff that poor families just are like... So you're feeling heavyhearted.Anna Aizer:Yeah.Scott Cunningham:You could have gone in a different direction. You could have not gone to graduate school or gone to get this master's. What's the decision criteria where you're thinking I've got to go in a new direction?Anna Aizer:Yeah. At a certain point I just felt as though I needed more training. I wanted more of a professional degree, so I got a degree in public health where you learned a lot about the health system and financing and the social determinants of health. I felt like I needed, again, more training. I should say, I went from that job, not directly back to graduate school, but I went and I worked in not a homeless shelter, but a service center for homeless people also in New York City. I went from the criminal justice system to the homeless system. I was there for another year. And then I went back to school.Scott Cunningham:To what, two or three years total between Amherst and graduate school?Anna Aizer:That's correct. Yeah.Scott Cunningham:Yeah.Anna Aizer:That's correct.Scott Cunningham:It's interesting you go to public health because I think a lot of people that don't know anything about anything, they'll be like, well, she's doing criminal justice so I could have seen her going to law school. Now she's going to the homeless thing. Okay, well, maybe she could do social work. What were the things you were thinking of? And how did you end up choosing public health? Because a lot of people don't associate either of those things with public health. They heard the word health.Anna Aizer:Right. So a couple things. One, I thought about law school, but I felt as though lawyers deal with the problem after it's happened.Scott Cunningham:Right.Anna Aizer:And I felt like maybe we should focus more on preventing.Scott Cunningham:Right.Anna Aizer:And the other thing, when I worked with homeless people I really did start to feel like this was a homeless individuals... Homeless families are different. I worked with homeless single adults, and for the most part in New York City at that time, all of the homeless single adults had serious mental health problems.Scott Cunningham:Yeah. Right.Anna Aizer:I really came to see homelessness as a public health problem.Scott Cunningham:A mental health problem.Anna Aizer:Yeah.Scott Cunningham:They hit public health. Got it.Anna Aizer:Yeah.Scott Cunningham:Right. Right.Anna Aizer:So that's really how... I could have done social work, but that's not really what I wanted to do.Scott Cunningham:Yeah. But it's funny you say preventative. To me when I hear that I'm thinking, oh, Anna's already starting to think about public policy.Anna Aizer:Yeah. I think I was.Scott Cunningham:I wouldn't necessarily think that if you were to tell me you went and got a master's in social work.Anna Aizer:Yeah. No, I think that's [inaudible 00:31:54]-Scott Cunningham:Because that cold be clinical or much more working with the... You would've had that experience and you'd be like, I want to work with these families. But that's not what you thought, so something else is going on. So you're thinking I want to do what?Anna Aizer:Yeah. I think I really was interested in policy already then.Scott Cunningham:Yeah. And that makes the masters of public health make a lot of sense.Anna Aizer:Correct. Yeah.Scott Cunningham:I see. So where'd you end up going, Harvard?Anna Aizer:I went to Harvard. Yeah. I got a masters in health policy and administration. And then I moved to DC. I worked for Mathematica policy research for two years, and I learned a lot about policy research.Scott Cunningham:Are you getting a quantitative training at the master's of public health when you went?Anna Aizer:Yeah, so that's where I really took my first micro theory class and my first statistics class. So I took biostatistics and micro theory there. And when I worked at Mathematica, I worked with a lot of economists. So most of the senior researchers at Mathematica were economists by training. That's where I really got exposure to the way economists think about, research and policy evaluation. It was then that I decided I wanted to go back and get a PhD in economics.Scott Cunningham:Okay. So what was it? What's the deal? Why do you like economics at this point?Anna Aizer:The senior researchers at Mathematica were either economists or sociologists or political scientists. I just felt like the economists had a very clear way in which they set up problems. I think that goes back to economic models of decision making.Scott Cunningham:Yeah. Right.Anna Aizer:And it just struck me that that was just a very good way to conceptualize almost any problem. I also liked the way they thought about data. I think the people that I worked most closely with and came to admire were all economists. So that's how that-Scott Cunningham:And how long were you there? Were you doing public policy stuff at Mathematica?Anna Aizer:Yeah. I was doing a lot of evaluations of Medicaid programs. In particular, Medicaid managed care, moving from a different financing model for Medicaid and evaluating that, and various settings, and writing them policy briefs so that... God. It was either two or three years, I can't really remember, maybe three years. I think I was there three years and then I went back to graduate school.Scott Cunningham:And then you go to UCLA?Anna Aizer:And then I went to UCLA.Scott Cunningham:Am I right that you were working mainly with Janet Curry?Anna Aizer:Yes. So Janet Curry was my-Scott Cunningham:You worked pretty closely with her?Anna Aizer:Yeah. She was my main advisor. The other folks I worked with were Joe Huts and Jeff Grogger.Scott Cunningham:And who?Anna Aizer:Jeff Grogger.Scott Cunningham:Oh, Jeff Grogger?Anna Aizer:None of whom are there anymore.Scott Cunningham:Yeah, yeah, yeah, yeah. Right. Right. I'm just curious. I associate you a lot with... Because I wrote that book on causal inference I'm obsessed with the causal inference stuff in all these weird ways, with all the people. I see Princeton industrial relations section, Card, Angres, et cetera. And then I see Janet Curry. And then I see you at UCLA, and I associate you so much with that methodological approach, especially for some of the papers that I've known really well. Did you get a sense when you were at UCLA, oh, this is causal inference, this is different, this is the credibility revolution? Or was it just really subtle, or this is just how you do empirical work?Anna Aizer:That's a great question. So I should also say that my first year econometrics teacher was Hero Inmans.Scott Cunningham:Was it, really?Anna Aizer:Yeah. Hero [inaudible 00:36:18] UCLA.Scott Cunningham:Oh my gosh. I didn't know that.Anna Aizer:For a short period of time. I was lucky enough that he was there when I was there. So he taught me in my first and my second years. So of course he was very much big part of this. And actually Enrico Moretti was also at UCLA when I was there, so I took courses with him. I think between Janet, Hero, Enrico and Joe Huts, they were really in the thick of it. That was the way it was done.Scott Cunningham:That was the way it was done.Anna Aizer:That was the way it was done.Scott Cunningham:Yeah. What did you learn? What do you think the salient concepts were that had you... This is a make believe, right? But I'm just saying, had you gone to a different school where you didn't have any of those people, what do you think the salient econometric causal inference kind of things were to you that you were like, oh, this is what I notice I keep doing over and over again, or keep thinking about?Anna Aizer:Well, I would say that the method was in service to the question. I feel as though I'm seeing it more these days. People, they find an experiment, a natural experiment, and then they figure out the question. That's not how I remember it. You had the question and then the method was in service to that question. I worry that that's getting a little bit lost these days, that people have the experiment and then they're searching for the question. I think that ends up being less interesting and less important.Scott Cunningham:Yeah, yeah, yeah. Yeah. There were certain economists, I think, that were so successful as approaching it that way. It seems like it was cut both ways, because it seems like applied causal inference grew on the back of that kind of natural experiment first, but it almost becomes... To a kid with a hammer, everything's a nail, so it's just like, look through the newspaper, look for a natural experiment. What can I do? How can I do this? How can I [handle 00:38:49]?Scott Cunningham:And it is funny. I don't think it's as satisfying too, just even emotionally. I guess you can find discoveries that way, like you were, but it does feel like you don't end up building up all the human capital with the importance of that question. It's almost like, you're like, well, how can I make this question really important? As opposed to it is important.Anna Aizer:Right.Scott Cunningham:What were you studying? I know what you were studying. At UCLA, what was the question that you were really captivated by?Anna Aizer:So I was really focused on health. You have to remember, I'd done a master's in public health and I just worked at Mathematica, so I was really focused on health. So really all of my dissertation was on health. My main dissertation chapter was actually on Medicaid in California. It was on the importance of enrolling kids early in Medicaids. I don't know if you know much about the Medicaid program, but there are many kids, 60% of kids, who are uninsured are actually eligible for the Medicaid program, but not enrolled in the Medicaid program. And that's partly because-Scott Cunningham:60%?Anna Aizer:Yeah.Scott Cunningham:Wow.Anna Aizer:We could reduce the number of kids who are uninsured in this country by more than half if you just enrolled all those kids who were eligible for Medicaid in the program.Scott Cunningham:Yeah.Anna Aizer:And part of the-Scott Cunningham:We saw that in that Oregon Medicaid experiment.Anna Aizer:Yeah. Oregon was mostly adults. I don't know how these numbers differ for adults and kids. I'm really more focused on kids. It's partly by design because Medicaid is a program. If you show up at the hospital and you don't have insurance and you're eligible for Medicaid, the hospital will enroll you. And most people know that.Scott Cunningham:Oh, is that right?Anna Aizer:Yeah. I mean, because they have every interest. They want to get paid, so they'll enroll you in the Medicaid program, but there's a cost to that. Because what that means is that kids, if parents know that once they go to the hospital their kid will be enrolled in the Medicaid program should they need hospitalization, they don't end up getting them enrolled prior to that. So they miss out on the ambulatory preventative care that might prevent them from being hospitalized to begin with. And that's partly because of the structure of the program, but that's also because the states made it difficult for kids to enroll in the Medicaid program. In California, there was a big change. The application for Medicaid used to be 20 pages long. Imagine that, right? They cut it down to four.Scott Cunningham:What kind of stuff are they asking on those 20 pages?Anna Aizer:Who knows? Who knows what they're asking.Scott Cunningham:Good grief. I mean, they're wanting them on there. Are they screening them out or are they just-Anna Aizer:I think that's partly what they were trying to do, right?Scott Cunningham:Screen them out? Because it's expensive.Anna Aizer:It's expensive.Scott Cunningham:You've got some of these legislators, they're like, this is expensive and I don't even want to do this so add a dozen pages.Anna Aizer:Yeah. So just make it hard. Now, what happened in '97 was the child health insurance program, CHIP. And they said, "If you want CHIP money..." So that's federal money to ensure more kids. "If you want CHIP money, federal money, you are going to have to enroll more kids in the Medicaid program. You have to do outreach." So the states actually were forced, and that's actually what prompted California to go from a 20 page application to a four page application. They also spent about $20 million on advertisement and basically training community based organizations in how to complete a Medicaid application. So they train them. "Here, you can help your clients enroll in Medicaid. For every application that you help that ends up getting onto the Medicaid program we'll give you 50 bucks." And this really mattered. A lot of kids started enrolling in the Medicaid program who otherwise wouldn't, particularly Hispanic and Asian American kids.Scott Cunningham:Is this what your dissertation ends up being about?Anna Aizer:This is what my dissertation is about.Scott Cunningham:On both the shortening and the payment?Anna Aizer:So it was basically once they started doing this you started seeing big increases in the number of kids who were enrolled in the Medicaid program. And you saw declines in hospitalizations for things like asthma. Asthma is a condition for which if you're being seen and treated on an ambulatory basis, you shouldn't end up in the hospital.Scott Cunningham:Oh. Wait. So what's your control group and all this stuff?Anna Aizer:What the state did was they targeted different areas, and provided training to those community based organizations in how to complete a Medicaid application. So they gave me all that data.Scott Cunningham:Get out of here.Anna Aizer:So I had all the data.Scott Cunningham:So you're doing some IB thing? You're doing some-Anna Aizer:Yeah. It was, basically if you live in a neighborhood where a community based organization had already been trained then you were much more likely to be enrolled in the Medicaid program. So you can see that.Scott Cunningham:Oh my gosh. This is so cool. Were you excited when you found that?Anna Aizer:I was super excited.Scott Cunningham:I bet.Anna Aizer:I was super excited. This was so old. I was begging Medicaid to send me this data. Begging, begging, begging. And they weren't really answering. And then one day Janet came in to the office where all the graduate students sit, and she said, "I think I got this fax for you." She handed this 20 page fax that has all the data on what community organization got trained and when.Scott Cunningham:Okay. Anna, I want to ask a meta question real quick. You just said, these days people maybe start with natural experiment first, but originally it was question first. Okay. Not devil's advocate, but just a statement of facts. The one reason they may do that is because when you find these kinds of natural experiments or whatever, it almost just feels almost itself random. You're weren't even really looking for it. You read something in the newspaper, you're like, oh my gosh, they're doing this weird thing. And the risk of going question first is, you could have this incredibly important question, like the Medicaid project payment thing, and you're like, if everybody in my department, like Hero Inmans and Moretti and Curry, who are to answer a question either subtly or not so subtly, or to answer a question is going to require this credible design and we really need you to staple this dissertation together. You're going to have to have a-Anna Aizer:I think that's why you have lots-Scott Cunningham:It seems really risky. It seems really risky.Anna Aizer:Yeah. I think you have to have lots of ideas.Scott Cunningham:You have to have lots of ideas.Anna Aizer:I think you have lots of ideas. A good friend of mine in graduate school was Enrico Moretti's RA. He told me that Enrico had tons of ideas. Wes, this was my friend, his RA, would just do some really quick takes on all of these ideas. And if there was something there he'd pursue it. But if there was nothing there he'd drop it.Scott Cunningham:What does that mean, nothing there, something there? What does that mean?Anna Aizer:Either, if you can't find exaggerate variation or the exaggerate variation doesn't actually work, you don't have the first stage, he'd just drop it and move on to something else.Scott Cunningham:That's a skill. That's almost some therapeutic skill to be excited about something and willing to let it go.Anna Aizer:Yeah. I think that's right. I think that's actually-Scott Cunningham:You got a lot of ideas?Anna Aizer:I had a lot of ideas. It never worked out.Scott Cunningham:Never worked out. And that's normal.Anna Aizer:I think that's normal.Scott Cunningham:Yeah. That's not a bad thing.Anna Aizer:Yeah. I think that's how research should go. In fact, I'm not as good as Enrico, I probably hold on to things for longer than I should.Scott Cunningham:Yeah, yeah, yeah, yeah. Boy, where'd you end up publishing that work? I should know this, but I don't know.Anna Aizer:That published in Restat Review Economics Institute.Scott Cunningham:Oh, cool. So what'd you end up finding?Anna Aizer:So what I end up finding is if you pay these organizations to enroll... Well, a couple things. Advertisement, just blanketing the television and radio with information. Sign up for Medicaid, sign up for CHIP, that does not work at all.Scott Cunningham:Doesn't work?Anna Aizer:No.Scott Cunningham:Advertising doesn't work?Anna Aizer:It doesn't work. What works is having these communities organizations help families complete the application. That's incredibly important.Scott Cunningham:That's a supply demand kind of philosophy that you see in drugs, too. Mark Anderson has this paper on meth. They would post these advertisements of people that were addicted to meth. They look horrible. They lose their teeth and all this stuff. It didn't do anything.Anna Aizer:Yeah.Scott Cunningham:Maybe I'm wrong, but it seems like you're talking about a group of people. They're like, they need more assistance. They need somebody... You think about that thing you were saying earlier about these kids that are higher income versus lower income. When I said there were 10,000 steps that the higher income people had, it wasn't really like the kids, it was external forces that were investing, going after them.Anna Aizer:Yeah. Right.Scott Cunningham:It seems like incentives need to be targeted to people to go after. For whatever reason it is not enough to just simply have it. You need people going in and helping along the way.Anna Aizer:Right. Agreed. I agree. They need support.Scott Cunningham:They need support.Anna Aizer:Yeah.Scott Cunningham:Okay. So that is amazing. I bet your advisors were so proud of you for that project.Anna Aizer:I don't know.Scott Cunningham:I think so.Anna Aizer:You'd hope so, but that'll be icing on the cake.Scott Cunningham:Right. Exactly. Yeah. I guess that's not super important.Anna Aizer:Yeah, it is. You do always want your advisor... I mean, I had tremendous respect for all my advisors. So yeah, I'd be very pleased if they liked the work that I did. Basically, states did spend this money to enroll kids early, but it paid off because it meant that they were less likely to be hospitalized. In fact, some of these programs can be very much cost effective.Scott Cunningham:Yeah. Yeah. I had told myself, I was like, well, I'm asking Anna about the juvenile incarceration paper with Joe Doyle. And then I was going to ask her about domestic violence. And I feel like I've got to make a hard choice now, because I don't have a lot of time. So I was thinking, well, let's see how this goes. And then we can fit. So domestic violence. First thing I want to ask is, how did you get interested in that topic? And when did it start? In a way I could almost imagine, oh, you've been thinking about domestic violence forever.Anna Aizer:Yes. So I actually-Scott Cunningham:You've been thinking about women ever since college.Anna Aizer:Yeah. That's true. And made that connection. This was basically my first big project after I started at Brown. After my dissertation I was thinking, okay, what's my next big project going to be? And I think that's a very important decision for junior faculty to think about. After you finish publishing your dissertation you got to think about what's my next big project? Because it takes so long to publish anything in economics, that's really going to matter a lot. That might be the only thing you publish before you're coming up for tenure given how long.Anna Aizer:I was thinking about it, and I just felt like I didn't have a clear question in mind, but just been looking at the numbers it's incredibly prevalent, domestic violence. But it's also shown some pretty encouraging trends. Domestic violence against women has been declining pretty significantly. In the US, I think about... I haven't looked the number up recently, but it was about 1,000 women a year were being killed, and so many more actually are victims of domestic violence. And if you look at victimization surveys, between one and three and one in four women in the US report ever being the victim of domestic violence. It's really prevalent. And it just struck me, this is a big problem and I don't know how to answer it, but we should know more about it given just how prevalent it is. And so that's how I started.Anna Aizer:I have a good friend from high school, and she's a lawyer in New York City. She was working with victims of domestic violence. She's a lawyer by training. She used to say, "These women have nothing. They have no resources. They are so poor." That, to me, just made me think about, okay, I need to start thinking about income and resources and poverty and domestic violence, because clearly that's a big part of this.Scott Cunningham:Yeah. Yeah. It's so funny. I feel like you and I ended up responding to the bargaining theory papers in the exact same way. That's when I was studying a lot of my stuff on couples and things and bad behavior on the part of the men, I was always thinking about sex ratios in the marriage market. Why I was thinking about that was the ability to exit the partnership could be really, really important. And I was curious. You can talk about people not having resources and not necessarily be thinking in terms of one of these Nash bargaining, like Manser and Brown, and McElroy and Horn, and Shelly Lundberg kinds of ways of thinking. I was curious, were you thinking about those theory papers a lot? Or am I just projecting?Anna Aizer:I had this friend, again, who was working and telling me just how poor many of the women she was working with were. And then once you actually look at the statistics, the survey statistics, it's true that any woman can be a victim of domestic violence, but it is really a poor woman problem. So it's very clear to me that poverty has a lot to do with it. It's because many of these women have no other source of support. They have low levels was in schooling. They have few prospects in the labor market. And they're really stuck. That is ultimately-Scott Cunningham:Stuck as in cannot leave.Anna Aizer:Cannot leave. I mean, they have a very-Scott Cunningham:Because that's the solution. That's one of the most important solutions, which is probably you need to leave the relationship.Anna Aizer:Yeah. Or you need to be able to threaten to leave.Scott Cunningham:You need to be able to threaten to leave. How important do you think the credible threat is? Because my sense is, that's to an economist, because they're like, you should thinking about unions and stuff. They're like, oh, credible threats. That's all you got to, you have to do it. I feel like, I don't know if that really works. I actually think the truth is you're going to have to leave. And maybe there's some marginal guy. We're talking about the marginal guy, but whatever, that's the info marginal, whatever. The extensive marginal guy, he's got narcissism personality disorder, substance abuse problems.Anna Aizer:Yeah. You may be right.Scott Cunningham:He's got major, major problems. And that stuff is very inelastic to everything.Anna Aizer:Yeah. You may be right. I can't answer this because I don't know for sure. At the same time I remember talking to some folks about this, and their feeling was that it's all a continuum of a bad relationship. Violence may be one extreme, but relationships have ebbs and flows. They can be better at some points and worse at others. So they did feel as though a relationship didn't always have to be violent, that you could have relationships that were violent at one point but then were no longer. Of course, you also have relationships in which that's not the case, and the only solution is to leave. But there could very well be relationships where you can have better and worse periods.Scott Cunningham:Yeah. The reason why I bring it up is because I feel like these days you hear a lot about mental health. Well, you hear about mental health period, but in domestic violence there'll be also an emerging story of the narcissist personality disorder. I've been always lately thinking, I've been like, I wonder if this is true. Anecdotally, what you see a lot is how manipulative... And that's like a very judgemental way of putting it, but I don't know how else to say it. How manipulative one of the person can be towards the other where they're like, "Well, if you loved me..." They get all this trepped up stories about love. What love becoming almost this story.Scott Cunningham:I've wondered for those people that can't or won't... It's actually won't, right? They can leave. I mean, there are some people they will be literally harmed if they leave, so I'm not talking about those people. But I mean, the person that literally you're watching an equilibrium where they don't leave, I've wondered lately if it's like, the victim is all tangled up with loyalty and love.Anna Aizer:Yeah. Sure.Scott Cunningham:And it is taken advantage of by a person that no one can tell them not to love this person. That's nobody's business.Anna Aizer:Yeah. Yeah. I mean, it is a really complicated thing.Scott Cunningham:It is so complicated. It is so complicated. Finding the policies that provide resources to a person. Some of that might be a person that's at those earlier ebbs too, those earlier ebbs in the bad relationship. And you're like, well, some people may not be ready to leave yet.Anna Aizer:I mean, this a thing where I do think the right policy response is providing resources to women, but also probably interventions aimed at the assailant is probably going to be just as effective. Sorry. My phone is ringing.Scott Cunningham:That's okay.Anna Aizer:Hello. Sorry about that. I thought it might be my kids.Scott Cunningham:I wonder about these battery courts. Have you heard about these [inaudible 01:00:05] courts?Anna Aizer:Yeah. I mean, they're-Scott Cunningham:I wonder what you know about those?Anna Aizer:Yeah. Not a lot, I would say.Scott Cunningham:Yeah. These issues of poverty and mental health and all of these things interacting in order to get healing and healthy meaningful lives to all everyone is... I do think this is something that economists can offer, but it's not something that... I wouldn't say there's a ton of people. You're one of a small number of people working on domestic violence, it seems like.Anna Aizer:It's a very hard thing to study. Data's very difficult to come by for obvious reasons, for a good reason. I mean, this is data that needs to be protected. Glenn Ludwig and the crime lab in Chicago, they're doing work around violence reduction more generally. And probably many of those principles and findings probably relate to domestic violence as well, changing the behavior of young people so that they are less quick to react and less quick to react in a violent way. When they do, we would probably have some pretty important spillover to domestic violence as well, I think.Scott Cunningham:Yeah. Yeah, yeah.Anna Aizer:I think there are ways to reduce violence more generally that would probably apply to the setting of domestic violence.Scott Cunningham:Yeah. It's funny, circling back to that judge who threatens with higher penalties. I think economists, when they think about violence and things like that, you're an exception for thinking about outside options and stuff like that, but the shadow of Gary Becker's deterrence hypothesis, it can just be this straight jacket for a lot of people, because they just only think in terms of relative price changes on the punishment margins. When you talk to psychologists, or you read that psychology literature about narcissism or borderline personality disorder or substance abuse, you're talking about a group of people that are, for variety of reasons, have really low discount rates or just have beliefs that things don't apply to them. Or in no uncertain terms, the elasticities of violent behavior with respect to some unknown punishment that you don't even know if it's going to real, it just seems like, we don't really know, but [inaudible 01:03:06] really big.Anna Aizer:Yeah. So there was this criminologist named Mark Kleiman. Do you know that name?Scott Cunningham:Oh yeah. Mark Kleiman. Yeah. Yeah.Anna Aizer:I mean his big thing was, it should be swift, sure and short. That's how we should do punishment. He felt as though that would be far preferable to the system in which there's uncertainty. But if it doesn't work out, you're going to spend a lot of time in jail. He thought that was a fair model.Scott Cunningham:The thing is, though, swift certain and did you say short?Anna Aizer:Short.Scott Cunningham:Yeah. Well, with prison sentences lingering on your record it is by definition never short.Anna Aizer:Yeah.Scott Cunningham:You face these labor market scarrings and you can't get housing, you can't get jobs and that does not go away. So even if the prison sentence is short, the person... I just feel like this is the tension around violence in the country, which is punishment has so many margins where it is permanent. It's got so many margins. And just being in a cage is only one of them.Anna Aizer:Yeah. I mean, particularly for young people, jail is incredibly scarring.Scott Cunningham:Incredibly scarring. Incredibly scarring. We've been studying suicide attempts in the jail and we-Anna Aizer:Yes, that's right.Scott Cunningham:We walked the jail for this one particular jail. I have never in my life seen anything like that. I've been working on this project for four years. I hadn't walked to the jail. I don't know. It's not the first thing that came to my mind. The team finally walked the jail. I spent the whole day there. The jails have so much mental illness in it. They just are in... It's not even cages. A cage has... Air gets in. It's a sealed box. It's like Houdini's box. They stay there, and for a variety of regulatory reasons and so forth, they stay in there. Can't have a lot of materials if they are at risk. If they've come in with psychosis because of substance abuse or underlying mental illness stuff, they might get moved into certain types of physical quarters. I just can't even imagine, just in an hour, let alone... And that's just jail. That's not even prison. It's just absolutely a trauma box.Scott Cunningham:Unfortunately, we didn't get to talk about your paper with Joe Doyle on the juvenile incarceration. But every time I teach that juvenile incarceration paper, where kids were incarcerated as a young person, and then end up not going back. It's not even the future prison part, it's the not going back to high school.Anna Aizer:Oh, of course.Scott Cunningham:And then when they go back, they're labeled with a behavioral emotional disorder. It's really like anybody that's had any exposure to a kid involved in corrections, you're like, oh, I know exactly what that is. They were traumatized. You don't even have to come up with some exotic economic theory. They were traumatized. That's why they come back to school with a behavioral emotional disorder. It is [inaudible 01:06:59].Anna Aizer:Yep. That's good.Scott Cunningham:That paper is one of the most important papers I have personally ever read. I teach it nonstop. And I've even cried teaching it in class. I get so emotional when I get to that part, because, I don't know about you, but it seems like it's really hard not to come away with... A lot of papers you read, you're like, well, we're not really sure exactly all to make of it. But when I read that paper that you wrote, I just think, especially when you think about the leniency design, I just think these kids probably didn't need to go to prison.Anna Aizer:Oh yeah.Scott Cunningham:Honestly, what else are you going to say? They end up committing more crimes. And they are not going back to school. How was this the policy goal? What was it like writing that paper when you started to realize what was going on?Anna Aizer:Again, when I worked in this Alternative to Incarceration program we had kids come into the program who had spent some time in jail. And we had kids who had spent very little time, maybe just a night. The kids who had spent even just three weeks in jail, they always did worse in the program. Always. It was a known fact. The program knew it. And the question was, well, are these kids somehow different? There was a reason why they were in jail and these other kids weren't. Is that why they do worse in the program? Maybe they're in jail because their family didn't show up for them in court. They couldn't make bail.Anna Aizer:Or was it something about spending three weeks in jail that just made it impossible for them to complete the program? This was a big question that was on everybody's mind. We talked about this quite a bit at the program, and we didn't know the answer. When I finally figured out how to do it, working with Joe, I wanted to know the answer to a question that I had been thinking about for over a decade.Scott Cunningham:Gosh. Were you emotionally upset when you started to see coefficients get really big?Anna Aizer:It really was not surprising. It really wasn't, because these are kids who are only marginally attached to school. These are not the kids who were going to school, doing well in school. These are kids who were not really that attached to school for whatever reason. So you take them out even for a month, they're not going to go back. I mean, it's obvious. We saw that in the program. What they ended up doing was moving a lot of kids from school to GED because they had not been involved in school, they were not involved in school. It just was much more likely that they would be able to complete a GED than actually go back to high school and finish.Scott Cunningham:Your paper, it like hit home for personal reasons. We had an event happen. I wrote a professor. I was like, this thing had happened. Anna and Joe find this result. I feel hopeless. There's this kid in town and I raised money for him. Basically, I was like, you just got to do everything in your power to not let them spend an extra minute in jail. And all this scared straight stuff. Parents get into it, too. They're exhausted. They're like, "Well, he's got to learn his lesson." Nobody learns a damn thing in jail. They don't learn a lesson. Because y

Diego Puga's Favorite Urban Economics Papers of 2021 Diego Puga is Professor of Economics at CEMFI in Madrid, Spain. In recent years, he has made a tradition of sharing his favorite urban economics papers of the year (specifically, urban econ articles published in the calendar year). In this interview, we chat about his favorites from 2021. They appear below as well as in this thread. He did similar threads for 2020, 2019, and 2018. Diego's Ten Favorite Urban Econ Articles Published in 2021: The Internal Spatial Organization of Firms: Evidence from Denmark by Camilo Acosta and Ditte Håkonsson Lygnemark in the Journal of Urban Economics. Location as an Asset by Adrien Bilal and Esteban Rossi-Hansberg in Econometrica. The Production Function for Housing: Evidence from France by Pierre-Philippe Combes, Gilles Duranton, and Laurent Gobillon in the Journal of Political Economy. Are Poor Cities Cheap for Everyone? Non-Homotheticity and the Cost of Living Across U.S. Cities by Jessie Handbury in Econometrica. East-Side Story: Historical Pollution and Persistent Neighborhood Sorting by Stephan Heblich, Alex Trew, and Yanos Zylberberg in the Journal of Political Economy. Building the City: From Slums to a Modern Metroplis by J. Vernon Henderson, Tanner Regan, and Anthony J. Venables in the Review of Economic Studies. Planning Ahead for Better Neighborhoods: Long-Run Evidence from Tanzania by Guy Michaels, Dzhamilya Nigmatulina, Ferdinand Rauch, Tanner Regan, Neeraj Baruah, and Amanda Dahlstrand in the Journal of Political Economy. The Effect of High-Tech Clusters on the Productivity of Top Inventors by Enrico Moretti in the American Economic Review. Commuting and Innovation: Are Closer Inventors More Productive? by Hongyu Xiao, Andy Wu, and Jaeho Kim in the Journal of Urban Economics. The Economics of Speed: The Electrification of the Streetcar System and the Decline of Mom-and-Pop Stores in Boston, 1885-1905 by Wei You in the American Economic Journal: Applied Economics. Appendices: Diego Puga: Provides examples of areas where urban economists could benefit from more interaction with urban planners to get better information about whether new initiatives are actually doing what we claim they do, including superblocks in Barcelona and the 15 Minute City in Paris. Eg: Super Blocks in Barcelona; The 15 Minute City. Greg Shill: Musings on the Boston streetcar paper (Economics of Speed), Location as an Asset, and the interaction between real estate prices and firm experimentation, noting the role of Kaldi's, a local coffee roaster/distributor, in raising the floor for the quality of coffee at locations in St. Louis (where Greg is visiting at Washington University School of Law this semester). Eg: an interview with the founder. Jeff Lin: On (Not) Reading Papers by Jan Hendrik Kirchner and Reading Books Versus Engaging With Them by Holden Karnofsky. Follow us on the web or on Twitter: @denselyspeaking, @jeffrlin, @greg_shill, and @ProfDiegoPuga Producer: Schuyler Pals. The views expressed on the show are those of the participants, and do not necessarily represent the views of the Federal Reserve Bank of Philadelphia, the Federal Reserve System, or any of the other institutions with which the hosts or guests are affiliated.

Vox policy reporter Jerusalem Demsas talks with the Atlantic's Derek Thompson (@DKThomp) about how the future of remote work could reshape America's cities, upend US labor markets, and cause fundamental shifts in where people live. Derek and Jerusalem discuss how it would take only a small percentage of remote workers to impact the urban geography of the US — with complicated implications for electoral politics and the climate. References: Jerusalem's Q&A with housing economist Enrico Moretti on the future of remote work: Remote work is overrated. America's supercities are coming back. Superstar Cities Are in Trouble [The Atlantic] How America Lost Its Mojo [The Atlantic] The Coronavirus is Creating a Huge, Successful Experiment in Working From Home [The Atlantic] Where Americans Are Moving [Bloomberg] Could a Heartland visa help struggling regions? [Economic Innovation Group] Host: Jerusalem Demsas (@jerusalemdemsas), policy reporter, Vox Credits: Sofi LaLonde, producer & engineer Libby Nelson, editorial adviser Amber Hall, deputy editorial director of talk podcasts Sign up for The Weeds newsletter each Friday: vox.com/weedsletter Want to support The Weeds? Please consider making a donation to Vox: bit.ly/givepodcasts Learn more about your ad choices. Visit podcastchoices.com/adchoices

Austin was a laid-back college town in the 1980s when a student at the University of Texas named Michael Dell began selling computers from his dorm room. At the time, Texas's capital city was perhaps known more for high hats than high-tech. But the company Dell started would become the world's largest PC maker and attracted a slew of talent that turned Austin into a technology hub. Enrico Moretti has studied how these “agglomeration economies” develop and the ways they drive growth. In a paper in the American Economic Review, he says that inventors produce more patented research when surrounded by other top talent in their field.   He also says that tech clusters will continue to thrive after the pandemic, despite speculation that they will be less relevant in a world of more remote work. Moretti spoke with Chris Fleisher about agglomeration and what the case study of Kodak in Rochester, New York, can tell us about how clusters affect innovation.

Is Hawaii at or near that Point?. The host for this show is Jay Fidell. The guest is Tom Yamachika. One fundamental assumption that has been made over the years by our lawmakers is that if you enact a tax, money will be raised. What if that weren't true? In late 2019, a pair of economists, Enrico Moretti and Daniel Wilson, published a paper titled “Taxing Billionaires: Estate Taxes and the Geographical Location of the Ultra-Wealthy.” In that paper, they followed the movement of 400 of the nation's richest people (the “Forbes 400”) and came up with a mathematical model to predict the chances that a particular rich person would move out of state in response to either an enactment of or a hike in that state's estate tax. If the person moved out, that person's contribution to the state's income and sales taxes would significantly drop, or dry up entirely. They predicted that Hawaii would LOSE money if it raised its estate tax. The ThinkTech YouTube Playlist for this show is https://www.youtube.com/playlist?list=PLQpkwcNJny6lmEllOKP493URXssFT4N7G

Jerusalem Demsas is a policy reporter for Vox and joins David on Macro Musings to discuss the state of housing in America and its implications for policy. Specifically, Jerusalem and David discuss the current state of the housing market, whether there is a housing bubble, how the housing shortage creates avenues for discrimination, the dynamics of racism in the US housing market, the impact of zoning laws, and much more.   Transcript for the episode can be found here: https://www.mercatus.org/bridge/tags/macro-musings   Jerusalem's Twitter: @JerusalemDemsas Jerusalem's Vox archive: https://www.vox.com/authors/jerusalem-demsas   Related Links:   *Housing Constraints and Spatial Misallocation* by Chang-Tai Hsieh and Enrico Moretti https://www.aeaweb.org/articles?id=10.1257/mac.20170388   *Is There a Housing Bubble?* by Jerusalem Demsas https://www.vox.com/22464801/housing-bubble-market-crash-supply-shortage-great-recession   *Stuck! The Law and Economics of Residential Stagnation* by David Schleicher https://www.yalelawjournal.org/article/stuck-the-law-and-economics-of-residential-stagnation   *The Housing Shortage Makes Housing Discrimination Much Easier* by Jerusalem Demsas https://www.vox.com/2021/5/26/22453293/housing-supply-shortage-discrimination-real-estate-cover-letters   *America's Racist Housing Rules Really Can Be Fixed* by Jerusalem Demsas https://www.vox.com/22252625/america-racist-housing-rules-how-to-fix   *The Fight Over Housing Segregation is Dividing one of America's Most Liberal States* by Jerusalem Demsas https://www.vox.com/22335749/housing-prices-connecticut-segregation-zoning-reform-democrats-adu-parking-minimum   *Why Does it Cost so Much to Build Things in America* by Jerusalem Demsas https://www.vox.com/22534714/rail-roads-infrastructure-costs-america   David's blog: macromarketmusings.blogspot.com David's Twitter: @DavidBeckworth

In this episode, Prof. Enrico Moretti of the University of California, Berkely speaks to Nicolas Wittstock about the economic geography of the United States. In particular, they discuss why certain industries agglomerate in some cities, and why other cities struggle to attract innovative businesses.

Remote work has become a dream come true for many people. But, can it also become too much of a good thing? One UC Berkeley researcher predicts that cities will thrive again once the pandemic is under control. His arguments are compelling and support the idea of a metropolitan or suburban lifestyle with fewer days at the office and commutes that are easier because highways are less congested.UC economist Enrico Moretti spoke with Vox about his forecast for the return of “superstar cities.” He talks about how highly skilled workers like to congregate in different metros, and why that trend is probably not going to go away -- although some amount of the urban to suburban shift may remain. Living in the suburbs is still within driving distance of the city and many major companies, making it an attractive option for a hybrid work schedule. The academic term for the clustering of different industries in certain cities is called “agglomeration.” Moretti says it’s one of the most important concepts for understanding why this happens. And he doesn’t think it’s going away. He says: “I think everything that we know from the economic geography before Covid tells us that these forces of agglomeration are quite powerful. And there’s no reason to think that the same tendency to cluster will be all that different in the post-Covid world.”He explains that, for example, the biotech industry clusters geographically in three or four cities. That same goes for other industries, like finance and pharmaceutical. He says: “If you look at all the inventory in computer science, the top 10 metro areas in the U.S. account for 70% of all inventors in computer science.” And it isn’t just in the U.S. Moretti says over the past 20 to 30 years, you can see signs of agglomeration in industrialized countries around the world. Moretti says one of the reasons for the growth of these clusters is that employees leave companies like Microsoft in Seattle, and start their own companies in the same area. But it’s not just that. Moretti says that start-ups also want to tap into a labor force that is already specialized. Although many of these more specialized high-level industries can support remote work, Moretti feels that working remotely 100% of the time won’t work well with the benefits of agglomeration.What he does see is that more work will be done from home but that workers will live within commuting distance of their office. He says: “For the typical employer it’s going to take the form of one work-from-home day a week, or at most two days of work-from-home a week.” He says: “If you have to show up at the office three or four days a week, you still need to live in the metro area where your office is.”And it isn’t all about work, either. Moretti says that people, especially the younger generations, are attracted to city amenities. The fact that cities like New York and San Francisco have looked deserted during the pandemic supports that argument because a lot of the urban amenities have been shut down.He says that once people feel safe from COVID-19 and the amenities re-open, he expects all those well-educated workers will return to cities. If enough people end up working a hybrid work schedule, that could make cities even more attractive because there will be fewer people on the road, commuting.The pandemic had many people thinking that cities were doomed as they moved to far flung areas that didn’t have as many people, or germs. And there have been plenty of headlines about this pandemic migration. But just how far did they really move?A report by retail traffic analytics firm Placer.ai supports the idea that while some people did move to other states, many people stayed closer to home. The results show that most U.S. states saw less than 1% population growth last year and that all that moving around was mostly to the suburbs, not other states.The report shows that Montana and Idaho had the highest number of migrants at 3.7 and 3.9% respectively. Florida, Arizona, and Maine also did well with more than a 1% increase. Cities that were above the 1% mark include Tampa, Charleston, Austin, and Phoenix.So there have been population growth hot spots. Many people have been moving to the Sun-Belt states, but it seems a larger percentage have just moved farther away from their nearby cities.Expedia CEO, Peter Kern, published an opinion piece in Fortune that discredits the idea that cities will remain undesirable after the pandemic is over. He says: “The global health crisis we’re living through is serious, and it will have lasting effects, but does anyone truly believe this event… is capable of fundamentally altering human nature?”The human nature he is referring to is the desire for social interaction. When you think of being human, you don’t think of living in social isolation. Kern says: “Maintaining close relationships with others is essential to our mental health and, ultimately, our survival.” He says he used to live 20 blocks from the World Trade Center and that after 9/11, many people were worried about a mass exodus. But the opposite happened. Kern says: “New York City witnessed booming real estate values, strong economic growth, inward migration, and yes, record tourism.” He says: “People always find their way back to cities.” We don’t know for sure what our post-COVID world will look like, but it looks like people may be more spread out in suburban single-family homes that are within commuting distance of their nearby cities.You’ll find links to these stories on the podcast player page for this episode at www.NewsForInvestors.comLinks:1 - https://www.vox.com/22352360/remote-work-cities-housing-prices-work-from-home2 - https://www.bisnow.com/dallas-ft-worth/news/commercial-real-estate/pandemic-forced-many-to-move-but-most-stayed-in-state-1083703 - https://f.hubspotusercontent00.net/hubfs/5995051/Migration%20Trends%20Deep%20Dive.pdf4 - https://fortune.com/2021/03/15/cities-covid-coronavirus-travel-expedia/

Otis is one of the people that has moved out of California. We discuss his reasons, and try to understand whether tech jobs will be coming back to the bay area after the pandemic. A lot of the theoretical framework discussed here is coevered in depth in the book The New Geography of Jobs by Enrico Moretti.

[00:00 - 01:30] Ma Milano restituira' Luciano a Roma? [01:30 - 19:00] Le strane teorie di Peppe Provenzano: se cresci tu devo calare io. Cosa dice la ricerca al riguardo? [19:01 - 36:56] Implicazioni per le politiche economiche attuate nel sud Italia. Saraceno, cattedrali nel deserto, la ricerca di Enrico Moretti sulle agglomerazioni ed i distretti italiani. [36:57 - 44:15] Le luminose idee di Catalfo e Tridico su come far funzionare il mercato del lavoro, agricolo e non. La burocrazia statale risolvera' ogni problema! [44:20 - 59:00] Le ancor piu' luminose, seppur ossimoriche, idee del professor Tridico su come sostenere "in modo anticilico" le pensioni del futuro. Luciano deve spiegarlo due volte a Michele, che non capisce. Ilarita'. [59:01 - End] Ma nessuno chiedera' mai conto a costoro delle follie che dicono e, a volte, persino realizzano? _____________________________ #LiberiOltre Contribuisci al nostro futuro

On this episode, Enrico Moretti discusses how high-tech clusters can be better governed, and he evaluates policies that might boost economic opportunity in areas that have been left behind. The post https://www.aei.org/multimedia/enrico-moretti-on-tech-hubs-and-economic-opportunity/ (Enrico Moretti on tech hubs and economic opportunity) appeared first on https://www.aei.org (American Enterprise Institute - AEI).

Enrico Moretti joins us to talk about America’s most dynamic labor markets, the “brain hubs”  and their impact in the U.S economy and society. Enrico Moretti is the Michael Peevey and Donald Vial Professor of Economics at the University of California, Berkeley. He serves as the Editor in Chief of the Journal of Economic Perspectives […]

Is unemployment in the developed world so low because people have simply given up on finding work? Ed Butler speaks to economist Danny Blanchflower of Dartmouth College, who says that a decade after the global financial crisis, workers in the US and Europe continue tp face a terrible jobs market that is not reflected in the official statistics. Is the problem that all the well paid jobs are being created in a few rich, expensive cities that are simply inaccessible to the underemployed? That's the contention of Enrico Moretti, professor of economics at the University of California, Berkeley. And according to Christina Stacy of the Urban Institute in Washington DC, even within these cities, service sector workers are finding themselves priced out of the property markets where the job opportunities exist. (Photo: A homeless man sleeping on a sidewalk in San Francisco, California. Credit: Robert Alexander/Getty Images)

Tyler Cowen joins us this week to talk about the slowing pace of innovation and growth in the United States over the past few decades. Has American society become too complacent? What would a more dynamic society look like?Show Notes and Further ReadingCowen’s book on the subject is The Complacent Class: The Self-Defeating Quest for the American Dream (2017).Cowen refers to this study by Enrico Moretti and Chang-Tai Hsieh called “Why Do Cities Matter?,” which claims that “Lowering regulatory constraints in [major] cities to the level of the median city would expand their work force and increase U.S. GDP by 9.5%.”Trevor mentions this episode of Free Thoughts featuring Yuval Levin, “Stuck in Political Nostalgia.” See acast.com/privacy for privacy and opt-out information.

Enrico Moretti is a professor of Economics at the University of California, Berkeley. His research covers the fields of labor economics and urban economics.  Professor Moretti’s book, “The New Geography of Jobs”, was awarded the William Bowen Prize for the most important contribution toward understanding public policy and the labor market.   His research has been covered by The New York Times, The Wall Street Journal, The Washington Post, Forbes, The Atlantic, Businessweek, The Economist, The New Republic, CNN, PBS and NPR. He lives in San Francisco with his wife and the son.   When considering the overall ‘health’ of the US economy, Professor Moretti believes that it is generally good.  Compared to the time period of the great recession, job creation has picked up.  Additionally, within the last six months, wages have picked up. When asked about how to assess the ‘health’ of the economy, he suggests that rather than look at day-to-day changes, such as the media, focus on the yearly changes. That gives a more realistic perspective.   Overall, American’s with a high school diploma have found their wages reduced by 20% and are less well off than the previous generation. On the other hand, those with associate’s college degrees or above– are doing better each passing year. This includes their standard of living, not only salaries but future outlook, their overall assets, and even their marital stability. This has created significant differences in earnings between those with more education and those with less. In fact, 30 years ago, it was less than a 40% spread; now it’s more than double – at 80%.  For the past 30 years the US has been losing 350,000 blue collar positions in manufacturing per year. A change that is not just a US phenomenon, but is also found in other advanced countries – such as Japan and Germany.  This has been predominantly based on increased automation in factories  Automation – robots, artificial intelligence – has had a profound effect on jobs. The new technology and automation have changed the face of jobs in manufacturing plants. Fewer people are required and instead of blue collar workers, they are highly skilled engineers.  This change has lead to an increased need for higher skilled workers.   When asked about the US cities that have undergone the most amount of change in the past 30 years, Moretti cited three that have had positive transformations: Austin, Texas, Raleigh/Durham, North Carolina and Seattle, Washington. Each of these has become an area of global innovation, has an availability of an excellent work force and also provides high wages.   In contrast, those he sees struggling are found in the ‘rust-belt’. For example, Detroit and Flint, Michigan as well as Rochester, New York, which have lost population due to a reduction in the need for traditional manufacturing jobs and therefore, lower wages and innovation.   Specifically, Moretti has found that the US can be divided into ‘three Americas’.   1. American Brain Hubs – strong workers with more than 40% of the population which holds a college degree. These include cities such as Boston, New York City and San Francisco. These cities are productive, innovative and provide higher salaries.  2. Former Manufacturing – struggling, shrunk in size, lost in terms of aggregate population.  3. Neither Brain Hub nor Former Manufacturing – maintaining current productivity and fairly stable population  What you will learn in this episode:  Why one tech job can increase the economy by multiples  Why cities with more college graduates are beneficial to all  Why the ecosystem of a city matters  The current ‘health’ of US economy  What effects AI and Automation have had on jobs  The differences in labor markets across different cities  What cities Enrico is paying attention to that are going through big changes  Enrico’s thoughts on universal basic income 

Enrico Moretti of the University of California, Berkeley and the author of the New Geography of Jobs talks to EconTalk host Russ Roberts about the ideas in his book. Moretti traces how the economic success of cities and the workers who live there depends on the education of those workers. Moretti argues that there are spillover effects from educated workers--increased in jobs and wages in the city. He uses changes in the fortunes of Seattle and Albuquerque over the last three decades as an example of how small changes can affect the path of economic development and suggests a strong role for serendipity in determining which cities become hubs for high-tech innovation. The conversation concludes with Moretti making the case for increasing investments in education and research and development.

Enrico Moretti of the University of California, Berkeley and the author of the New Geography of Jobs talks to EconTalk host Russ Roberts about the ideas in his book. Moretti traces how the economic success of cities and the workers who live there depends on the education of those workers. Moretti argues that there are spillover effects from educated workers--increased in jobs and wages in the city. He uses changes in the fortunes of Seattle and Albuquerque over the last three decades as an example of how small changes can affect the path of economic development and suggests a strong role for serendipity in determining which cities become hubs for high-tech innovation. The conversation concludes with Moretti making the case for increasing investments in education and research and development.

According to rising young economist Enrico Moretti, of U.C. Berkeley, we are in the midst of an unprecedented redistribution of jobs, population, and wealth - and a huge shift in the world's centers of innovation - that will only accelerate in the years to come.Tectonic shifts are reshaping the labor market — from globalization and income inequality to immigration and technological progress — and these shifts are dramatically affecting our communities.New Innnovation Hubs are emerging - cities with a well-educated labor force and a strong innovation sector. Their workers are among the most productive, creative, and best paid on the planet. At the other extreme are cities once dominated by traditional manufacturing, which are declining rapidly, losing jobs and residents.In the middle are a number of cities that could go either way - and, for the past 30 years, these differences have been diverging at an accelerating rate. This divergence is one the most important recent developments and is causing growing geographic disparities is all other aspects of our lives, from health and longevity to family stability and political engagement.But the winners and losers aren’t necessarily who you’d expect. Moretti’s groundbreaking research shows that you don’t have to be a scientist or an engineer to thrive in one of these brain hubs.In fact, Moretti has shown that for every new innovation job in a city, five additional non-innovation jobs are created, and those workers earn higher salaries than their counterparts in other cities.It wasn’t supposed to be this way.As the global economy shifted from manufacturing to innovation, geography was supposed to matter less. But the pundits were wrong. A new map is being drawn — the inevitable result of deep-seated but rarely discussed economic forces.Julie Ann talks with Moretti about how these trends are reshaping the very fabric of our society - and the effects these innovation shifts will have on you, your work, and your potential going forward.

Economists say the “Great Recession” is over, but for most people, the hard times are not. If you're a young person looking for a job, it looks pretty dismal out there, and it may not brighten up anytime soon. On this edition of How We Survive, we look at how the economy is hitting the “millennial generation.” Featuring: Alissa Anderson, Deputy Director, The California Budget Project; Chris Hutchins, laid off young worker; Lynne Lancaster, co-author, “The M-Factor: How the Millennial Generation is Rocking the Workplace;” Enrico Moretti, Professor of Economics at UC-Berkeley; Nora Rose, volunteer, Temescal Library's Homework Help program; Thomas McCall, Richmond resident.   For More Information:   California Budget Project Sacramento, CA http://www.cbp.org/   Cross Currents Radio on KALW News San Francisco, CA http://kalwnews.org/   Youth Empowerment Center Oakland, CA http://www.youthec.org/   The post Making Contact – “How We Survive: The Recession Generation” appeared first on KPFA.