But We Knew That!
Sandra Black and her fellow economist Jay Shambaugh made their way through the meandering hallways of the West Wing. They had just been invited into the Oval Office to brief the president on why wages for low-wage workers have been stagnating in recent decades.
It wouldn’t be the first time Black had met Obama. She had joined the three-member Council of Economic Advisers (CEA) the previous year and periodically discussed the monthly labor reports or unemployment numbers with the president. But this time was different, as it was just the two of them and the president talking about economic research and what economists thought about the relative decline in wages of low-wage workers. Importantly, how were technology and the adoption of artificial intelligence going to affect these workers in the future?
Perhaps Black, who joined the SIPA faculty in fall 2019 (with a joint appointment in Columbia’s Department of Economics) and was recently elected to the American Economic Association Executive Committee, got her start researching labor economics because her mother was an educator. Or maybe she was inspired by a math problem that presented a character with an implausibly high number of apples. It may well have been the unceasing arguments between her and her sister—arguments over their parents’ leniency toward the other.
Whatever it was that led Black to conduct research, her curiosity has sparked countless studies in one-upmanship. Eldest children may claim they were most likely to become successful; Black has examined the notion empirically. You may remember a childhood friend who was always willing to accept a challenge or an audacious dare, but it’s Black who conducted the study on nature versus nurture and risk aversion. And while it may seem obvious to some, Black has repeatedly quantified overwhelming racial and ethnic discrepancies in the college application and admission processes.
“My husband makes fun of me sometimes because I will show what people already knew to be true,” Black says during a Zoom session in late March. In her doctoral dissertation, for example, she demonstrated that people were willing to pay more for homes in good school districts. “People would say, ‘But we knew that,’” she jokes, “and I would say, ‘But I have quantified it.’”
• • •
The elder of two daughters of a lawyer father and her teacher mother, Black didn’t set out to become the prominent researcher in labor economics that she is today. In fact, she didn’t realize her passion for economics until she turned a blind eye on mathematics altogether.
“I was not one of those people who always knew what I wanted to do,” says Black. “So when I went to college, I thought because I was really good at math that I was going to be a math major.”
But Black found that solving problems in a vacuum wasn’t entirely satisfying. It was an economics class, instead, that provided the context she was looking for. Moving from mathematics to economics, Black found a rationale for the problemsolving that had previously left her dissatisfied.
“It was the perfect balance: math and logic, and thinking through puzzles that we care about, problems that we care about as a society,” she says. “That really resonated with me.”
Upon her graduation from University of California, Berkeley, Black worked as a research assistant at Charles River Associates, an economic consulting firm, before heading to Harvard. Several grants, fellowships, and research projects and one dissertation (the one on home prices and education) later, Black now had a PhD in economics. The world was hers, and so she left Boston for what seemed like the most important place on earth—New York City.
Beginning her career with a four-year stint as an economist and later a senior economist at the Federal Reserve Bank of New York, Black turned to research topics she found most interesting—and knew the greater public would as well.
“What inherently interests me is thinking about how people behave and how people respond,” Black says. “I was really happy to see economists can do really interesting work on the topic. When you think of labor economics, a lot of people just think of unemployment insurance and those types of topics, but what we study is just a lot broader than that.”
One of her recent studies that comes to mind is “Poor Little Rich Kids,” a look at wealth inequality across generations. In it, Black and a team of researchers looked at data from Sweden and found reasons for the high correlation between the wealth of parents and the wealth that their children would go on to accrue as adults. To compare the effects of what is often called nature versus nurture, they studied adoptees—who have one set of biological parents but are raised by another set of parents, which makes it possible to distinguish the effect of the biological parents (nature) from that of the adoptive parents (nurture). The answer, again, provides evidence in “I-told-you-so” fights: wealthy people are not inherently predisposed to become wealthy; rather, they have more access to different types of opportunities, resulting in greater opportunities for their children, and so on.
“That’s the most important part, since it suggests wealthy people aren’t wealthy because they’re better people. They’re wealthy because they have better opportunities growing up from their families,” Black says, putting her 80-page study in a nutshell. “I think that’s such a cool way of thinking about it and trying to answer a question that we think is kind of fundamentally important from society’s perspective.”
• • •
Black, Shambaugh, and Obama discussed the latest economic research on technological change in the bright light of the Oval Office.
“We’re sitting there in the Oval Office, and the president, who is supersmart, was asking what we thought and what we knew about skill-biased technological change and what the research has shown,” Black says with glee. “In a geeky way, [it was] the coolest 10 minutes that we’ve ever spent.”
“When Jay and I left the office, we just stood there and looked at each other,” Black says between laughs. “We were like ‘that was so cool!’ So there were really plenty of great opportunities like that.”
• • •
After Black left the Federal Reserve, she became a professor at UCLA and eventually the University of Texas, where she was quite content with her life conducting research and teaching economics. She knew the chance to join the CEA was not one to pass up lightly but couldn’t imagine that something else would give her the same sense of purpose as her work in Austin.
“As a professor, you think about one thing very deeply and you become an expert in that particular field,” Black says. “When you’re in DC, you have to be a lot broader and you have to know less about more things.”
Black ended up jumping in with both feet, deciding to embrace the challenge as another research topic—a chance to consider why people take such a position to begin with. Working at the CEA turned out to be highly challenging and even more rewarding.
“You’re doing things that matter on a day-to-day basis, even hour to hour,” she says. “It was really life-changing in a lot of ways.”
Black had long considered her research to be quite relevant to public policy, but the visceral experience of seeing how research influenced real-world decision-making was striking: Every time she briefed the president, she knew it could result in policy change that could affect the country.
“Our job, partly, was to disseminate what new research is saying to the policymakers and the people in the White House,” she says. “And it was really eye-opening to see how they incorporated that research into their thinking.”
One such example was the Ban the Box campaign, which proposes to remove a check box asking job applicants if they have a criminal record. While the initiative seemed like a progressive move forward, Black discovered new research by other economists showing that the policy could have unintended negative effects on minority applicants. The research suggested that, in the absence of information on criminal justice involvement, employers would simply assume (based on race and ethnicity) that minority applicants had prior contact with the criminal justice system, thereby reducing the effectiveness of the policy. To date, 35 US states and more than 150 cities and counties have passed Ban the Box laws.
“When we summarized the research for the president and the White House staff, it was our job to evaluate the quality of the work to assess how good it is—does it seem solid?—and then circulate it to the people involved in the policy work,” Black says of the process. “And I really appreciated the conversation that people had as a result of it, and how you can use research to design good policy.”
• • •
After her father died seven years ago, Black was looking for a new hobby when she came across some metalworking classes in Austin. “I had all this mental space that freed up from not worrying and thinking about that and I didn’t know how to fill my time,” she says, “so I took a class on jewelry-making, and since then I have been making jewelry.” In addition to her jewelry-crafting techniques and Pilates workouts, Black squeezes in enough time to read plenty of books—crime fiction is her favorite genre—and avoids checking the news compulsively.
She joined SIPA last fall, she says, “because of the environment— I love the constant activity and the feeling that so much is going on. People say that about New York City, but I think it is also true of Columbia. “I’m looking forward to working with students on a Capstone project, which seems like a great opportunity for students to get hands-on experience working on projects that are important for our community.”
In parting, Black says she hopes others will join her in using analytical tools to tackle societal problems that might seem to have obvious answers. “What happens when workers’ rights are afflicted every day?” she asks, or “What questions have been brought to light by the COVID-19 pandemic?” “I’m really interested in how workers are being hurt by the fact that unions are declining and workers have a declining voice in our society and that wealthy people have a disproportionate voice in our public policies,” she says, offering a teaser of what perhaps could be her next research topic. Still, Black hopes others will likewise be curious about the questions she asks every day.
“Being a part of the SIPA community gives me the chance to incorporate both my research as well as my policy experience from my time on the Council of Economic Advisers into my teaching,” she says, “and I can’t wait to share these experiences with the students.”
This story appears in the most recent issue of SIPA Magazine, published in October 2020.