The Economists in the Room

At the Department of Labor, the World Bank, and the Federal Reserve, I was always surrounded by fellow economists. Each institution had plenty of us, often with comparable training and similar analytical tools. What set one economist apart from another was not necessarily their education but the perspective they brought to the work.

I think this is an aspect of public service that economists sometimes undervalue. When everyone in a room has studied the same models, arriving at similar conclusions can become almost too natural. The real contribution of an individual voice is often the ability to recognize something others have overlooked.

Same Training, Different Vantage Points

A common educational background often produces similar ways of thinking. People who spend years working within the same institution can develop established habits, approaching certain problems through familiar and traditional methods. At the World Bank, I found that coming from outside the institution was particularly useful because it allowed me to bring a different perspective to questions that had long been examined in much the same way.

Policy work also means collaborating with people from a wide range of disciplines, including lawyers, anthropologists, and agricultural specialists. There is much to learn from colleagues with different expertise, and that learning matters. Still, my advice to anyone transitioning from research into government would be to hold on to their own discipline. Being a supportive colleague does not mean you cannot respectfully point out when the evidence suggests a different conclusion.

What I Brought to the Table

My perspective starts with my upbringing. Growing up in Colombia, I witnessed early in life what happens when people lack access to employment and essential services. That experience stayed with me as I became a labor economist, spending years conducting field experiments and collecting administrative and survey data to understand how policies can expand or restrict opportunities for work. In my policy positions, including at the U.S. Department of Labor following the Great Recession, I contributed to shaping unemployment insurance, workforce training programs, and hiring incentives.

Those experiences influenced the questions I asked throughout my career. At the Fed, I frequently addressed the maximum employment mandate and the distributional consequences of inflation in my speeches. I also traveled to ten of the twelve Federal Reserve districts, meeting people from different communities along the way. When colleagues have similar academic foundations, experiences like these can provide the perspective needed to recognize dimensions of a problem that others in the room may not see.

Where My Own Discipline Comes From

I completed my Ph.D. training at Berkeley, where the economics department had a distinctive intellectual environment at the time. There was a strong belief in starting with the data, remaining receptive to what the evidence revealed, and then using theory to explain the patterns that emerged.

Of course, beginning with data does not mean examining it without any framework. When a dataset allows for a million different interpretations, it is easy to identify one that ultimately tells you very little. Theory helps narrow the possible explanations, guiding researchers toward the relevant questions and establishing what qualifies as meaningful evidence. The data can then challenge, and sometimes overturn, the original theory. For me, that is when research becomes especially interesting.

George Akerlof served as my dissertation advisor, and he was remarkably patient with questions that fell outside conventional approaches. Rather than steering me away from unusual ideas, he encouraged me to explore them and urged me to draw on different research methods instead of relying on just one. I was fortunate to be part of a department where several faculty members who taught or mentored me later received Nobel prizes, including Paul Romer, Daniel McFadden, and Oliver Williamson.

Yet what stands out most in my memory is the collaborative spirit among the students. We organized study groups during our coursework and later formed discussion groups around our dissertations. Many nights were spent in the computer lab, back when running a single program could take the entire night. We spent nearly as much time debating our findings in cafes around campus. I learned an enormous amount from my classmates, and that process of learning has continued through my coauthors, increasingly including junior colleagues.

First Best and Second Best

The most difficult part of transitioning from academic research to policymaking is not necessarily the intellectual challenge. It is recognizing that having the right answer does not always mean that answer can be implemented.

Economists are trained to identify the best possible policy response to a problem, and that remains important. But policymaking takes place within political constraints that are genuine, often beyond your control, and frequently impossible to change. As a result, the first-best solution may be politically unattainable, leaving you to choose between a second-best option and no action at all.

Over time, I have come to see compromise under those circumstances as something other than a lack of conviction. In fact, refusing to compromise can represent the greater failure. The alternative to a second-best policy is rarely the ideal solution. More often, it is the absence of any policy, and that absence carries real consequences for people whose lives are affected by these decisions.

Navigating these limitations also means understanding the people responsible for them. While serving on the World Bank board, I worked alongside executive directors representing the Middle East and North Africa, Africa, Latin America, other G7 countries, and the Asia Pacific region. Convincing a group like that requires more than demonstrating that your argument is technically correct. You need to understand each person's motivations, the constraints they face, and how a proposed course of action might advance their interests alongside your own.

Government Is Less Siloed Than People Assume

Many people imagine that government agencies operate largely independently, with the Labor Department having little contact with Commerce, Health and Human Services functioning separately, and the White House remaining somewhat removed from the process. My experience working across two administrations gave me a different view. When addressing the transition from education into employment, for example, collaboration with education officials is essential. Programs that depend on wraparound services require coordination with Health and Human Services, while initiatives involving tax subsidies naturally bring the Treasury into the discussion.

At the Labor Department, I saw this kind of cooperation firsthand. Alan Krueger and Katharine Abraham, who were at the Council of Economic Advisers, regularly brought together economists from across the administration. These meetings helped ensure that different initiatives reinforced one another rather than duplicated existing efforts. I joined the department after the Great Recession, when unemployment had reached double digits for the first time in decades. That coordination supported tangible policy efforts, including unemployment insurance, training programs, payroll tax subsidies, and tax credits designed to encourage employers to hire.

Why Any of This Is Worth Doing

My reason for pursuing economics was to contribute to solving a particular set of social problems. Early in my career, I did not really expect my academic research to reach people who had the authority to make policy decisions. So when some of my papers began attracting the attention of policymakers while I was still an assistant professor, it came as a genuine and encouraging surprise.

That experience carries a lesson I would want doctoral students to understand. The gap between a carefully identified empirical finding and an actual policy decision is often smaller than it appears from within an academic department. But closing that gap requires deliberate effort. No matter how many economists are involved in a discussion, someone must offer a perspective that is not already represented, recognize when a second-best solution is the only realistic option, and speak clearly when a proposed policy is unlikely to succeed. In my experience, those are the moments when economists make their most meaningful contributions.