We're talking to top economists and finance experts
to better understand how the U.S. and the world are getting
back to business after the pandemic. Today I'm talking with
Esther Duflo. She's a French American economist, and a Nobel
Laureate. Hi, Esther, thank you so much for joining me.
Thank you.
One of the things that the U.S. government did to help people
through this crisis was to enhance unemployment benefits,
give people even more money than they would normally, because
they were out of job often through no fault of their own.
But right now, there's a big debate as we get through this
recovery over whether or not those benefits should continue.
Some people think that it's actually disincentivizing people
from returning to the workforce, what do you think?
Well, there has been about half a dozen study of the impact of
the $600 weekly benefits when they were in place. And they all
came up with the same conclusion that they did not have
disincentivizing effects on labor supply. So, this came as a
surprise to many people. In fact, there was an opinion
leader in the Wall Street Journal that said, basically,
the data must be wrong, because it doesn't fit with common sense
that people would work less if you give them more money, not to
work. But apparently, it was really solid results, it was
replicated by many people. So, of course, this is a very
special time and people when they had a chance to have a job
that didn't want to let it go. But I think that's still true
today. So we would have to study later, what is the impact of the
now $300 weekly benefits, but on the basis of what we what we
know, from the [inaudible] experience, I wouldn't be
concerned that this is not the reason why people are not going
back to work as quickly as, as we think they ought to. They
also have to find the right job, they have to move for a job, all
of that takes time. In general, there is really plenty of
experience and data in the world that shows that people really
are not that sensitive to this type of programs that it doesn't
it doesn't make people lazy.
I gotta say, I'm a mom, I've got three kids. So this is personal
as well as professional. What do you think are the opportunities
for reimagining the way that we work? And the way that we
parent? Is there a new balance that can emerge? And what does
it look like?
So I think this opportunity is already in the conversation. And
in particular, it was in, it's in the conversation around
childcare and financing childcare for everyone. That
goes in one direction, which is making sure we I think we
realized that in the current system, it's just not very
workable. It works just badly, we know the woman sustain
themselves by by pulling on their own bootstraps, in the
best of time, and then we were not in the best of time and that
the bootstrap just like, crashed.
Take the boots off. I mean, not even wear boots anymore.
There'll be, I think a wider conversation about what it is to
have children who is responsible for taking care of this of this
children. And whether it's the family alone, or whether it's
society as a whole. And then the U.S. is a little bit behind in
comparison, for example, to continental Europe, where it is
understood that children are taken care of by society, not
just by the family, and in particular by the woman. So I
think we are moving in this direction the childcare
discussion is moving in this direction. And then whether or
not how. The second half of this question that you were
implicitly asking is, are we also going to leave some merging
to women who have jobs to also take care of their children in a
more flexible way? And that I don't know. This is again,
something I'm not very, very good at predicting the future.
And I don't think none of them. None of us are. But there is
certainly a tendency in the United States for putting a lot
of weight on extremely long hours for no particular reason.
And as the, you know, Claudia Goldin has shown. This has been
one of the major hindrance standing in the way of women
succeeding in careers. So women are less likely to succeed and
even start career that demand a very large number of hours like
being a surgeon or lawyer or, and one thing, you know the
next revolution in women's participation in the labor
market, as Claudia Goldin argues, is getting rid of this
idea that a good worker is a worker that puts 90 hours a
week, maybe it is just not needed. Neither for men nor for
women, maybe we can all work a little bit more reasonable and
more flexible hours. And I think the pandemic might help might
have helped with that. Because people had to adjust
necessarily. I'm curious to see whether it's gonna stick or not,
I think, I hope that the conversation in the media will
help it stick because I think it will make everyone happier.
I'm wondering if there are things that you've seen across
the U.S. that are working, even if it's in small, local ways,
and things that aren't working? Have there been any lessons that
you can take from that sort of individualized approach in the
U.S.?
I think one thing we've learned from again, the world at large,
and probably to across U.S. states as well, is the key
importance of trust. And in particular, trust in government.
What we learned in this pandemic is that we certainly we needed
the government, that we before we were, especially in the U.S.,
we love to not love our governments. And since Reagan,
we've learned that government was the problem, not the
solution. But in this pandemic, suddenly the government had to
finance the vaccine, and convince people to lock down and
convince people to wear masks, and so on and so forth. So
certainly the government was at the core of our lives, and
therefore the trust in governments at the country level
in the world, and I think at the state level in the US is also
correlated with how well the pandemic was managed. So I think
this is also maybe something that that might stay with us in
the future is if we succeed in, you know, through the
vaccinations, and and the recovery in the economy. If we
succeed in putting this behind us, and this is seen as a
success, in part of massive government effort by two
governments, by the Trump administration, followed by the
Biden administration, will that to some extent, reconcile some
of us with the project of governments? And that that is, I
think, an interesting perspective and potentially a
hopeful, hopeful thing to consider.
What can be done to correct the global inequity in vaccine
access?
So the global inequality in vaccine access is a shame. It
just should be, all the rich countries, not just the U.S. but
Europe as well should be ashamed considering that, together, they
are stockpiling about a billion excess doses when something like
less than 3% of the of the world of the poor part of the world
are vaccinated. And it makes no sense from any perspective, it
makes no sense because if vast number of people are not
vaccinated variants can develop and go back to our countries and
potentially make our own vaccines ineffective. It also
makes no sense because it makes no sense in a common world not
to have some amount of sharing aspect across the world. So we
have to correct that quickly. The IMF estimates that it would
cost only $50 billion to immunize 4 billion people by the
end of next year. This is it, compared to the trillion dollars
that we've spent on stimulus, it is hardly visible. So I think it
is great news that the U.S. just committed to give 500 million
vaccines, but there are 7 billion people in the world. We
need to vaccinate as soon as possible, at least 4 billion of
them.
Where do you see the U.S. economy five years from now?
Before the pandemic, the U.S. had serious issues. We found it
very difficult to talk to each other and solve our problems.
The economy, the political world is extremely polarized. There is
racism and discrimination and anti migration, feelings that
are very raw and very present. And there is also a huge
increase in inequality that was made only more apparent and seen
during the pandemic that was very much there before. All
these problems seems hard before the pandemic. In fact, I had a
book coming out in November before the pandemic called "Good
Economics for Hard Times." And little did I know the times
we're going to become so much harder after a few months, but
the times were already already hard. And something needed to be
done to address these issues and something still need to be done
to address these issues to tackle inequality, to tackle the
place of women in the workforce, to tackle the position the fact
that so many people feel stuck in place and unable to succeed,
being people in [inaudible] care or people in Black and
Brown communities around the countries. So the, in the
absence of the pandemic, I think it would have been very hard to
solve these problems, but maybe some, the crisis would have come
to a head, and we would have come to a point where we had to
have the conversations that allows them to solve that. The
pandemic might have accelerated that. And my hope is that it
creates the conditions where we can see that we have so much
more in common and so many interests in common in
preserving ourselves as society and the world, that it makes our
conversations a little bit easier. And I'm not seeing that
among politicians as yet, sadly, but you've seen that among
people, in the sense, for example, that in polls when you
pull on economic issues, they seem to be a lot of agreement on
some basic things. For example, in Florida at the same time as
they voted for Trump in the President election, they also
voted for an increase in the minimum wage to $15 at 60%. So
there is tremendous agreement in some economic measures. And that
agreement, I think, is more apparent now that the that the
crisis has forced us to confront our maybe the fragilities in our
lives, and I'm hoping that it will force politicians to
convert to that conversations as well. Whether or not they
succeed, I think is a big question mark.