Video interview with Anna Stansbury

For those who prefer videos to podcasts

8

Thought I’d post the video interview of Anna to go with the podcast. I hope you enjoy it. The “economics and public policy” mixtape series I’ve been doing is pretty labor heavy, which fits my personality as I have the most curiosity about the labor economists. Others I’ve interviewed for this series are Larry Katz, Alan Manning, Elizabeth Popp Berman, Sandy Darity, Jonathan Meer, and Jeremy West.

Why not Josh Angrist and Orley Ashenfelter in the “economics and public policy” mixtape series since it’s so heavy on labor? Because they fit in the “causal inference and econometrics” mixtape series! (This podcast is starting to feel like how I claim my office is organized perfectly when it’s really just four massive piles of stuff on my desk).

Transcript

Scott Cunningham:

In this week's episode of The Mixtape, I had the pleasure of interviewing Dr. Anna Stansbury, an assistant professor at MIT's Work and Organization Studies Department. Anna is a PhD economist working at the intersection of two fields, macroeconomics and labor economics. And in our interview, we did basically two things. I learned more about her personal story, where she came from, how she got where she is. And I learned more about her thoughts and ideas about what's going on with workers in the United States today. Anna grew up in England. Her parents were both lawyers who ended up leaving their professions to go work on problems with corruption in the construction industry.

And I don't think I was reading too much into it to see this theme of interest in social justice in her parents, as well as how Anna has what appears to be sorted into that herself. She came to the United States after graduating from Cambridge University with the degree in economics to study at Harvard Kennedy School's Masters in Public Policy Program. Rather than going into something directly related to public policy, though, she stayed at Harvard and got her PhD in economics, because in her own words, she wanted to have impact and realized that she could do that best as an academic economist. This is not an unusual motivation at all within economics in my experience.

If you go back and listen to my interview with Susan Athey from earlier this year, you'll hear many types of similar things with what Susan said drew her to economics too, but Susan and Anna, while they specialize in different areas within economics, they're very similar in that they think economics can help improve the world. Because they want to improve the world, they decided to become an economist. I know of Anna only from arm's length. We follow each other on Twitter and are part of a larger network dubbed #EconTwitter. This is our first time to actually talk.

And in preparing for the talk, I realized I read through a bunch for papers at a topical level, but the more I began to read them, the more intrigued I was by her research and decided to start an independent readings this semester with a PhD student to go through her labor papers, as well as a bunch of other papers that I've been meaning to read. She works in topics in labor that I think are really critically important. That if you're paying attention in labor, you're watching this resurgence of interest in an area called monopsony, as well as just issues regarding policies that can help workers. The overall wellbeing of workers is clearly something that Anna is very interested in. And the overall wellbeing of workers is not just simply about employment, but it's also about real income.

And the reason why real income is really important, wages in particular is really important, is because most Americans, most people in the world buy goods and services, which go into their lives to make their lives better using their wages. They don't use profits from a firm that they own and they don't use dividends from capital or stocks or savings or anything like that. They're workers. Many of them live paycheck to paycheck, very low savings, trying to make ends meet. She's a part of a large of a group of people active in labor economics.

That's forced me to really go back and look more closely at my priors about the role that minimum wages may or may not be playing in helping workers, the role that unions have traditionally played in helping workers, whether these things are effective policies or not, and also just making me realize again, that the gains from trade that happen between the worker and the employer are not always distributed the same over time. It's a bunch of puzzles that Anna has pointed to that's made me really want to go back to the books and the drawing board and think more deeply about what exactly is going on with workers and the labor markets and the product markets over time to start thinking through what policies may be helpful.

Talking with Anna was great. I'm going to be spending the fall reading more of her papers. I highly encourage you do too. Hope you enjoy this as much as I did. Thanks so much. My name is Scott Cunningham and this is Mixtape Podcast. Okay. It is my pleasure to have Dr. Anna Stansbury on the podcast this week. Anna, thank you so much for being on the podcast.

Anna Stansbury:

Yeah, thanks for having me.

Scott Cunningham:

Well, before we start, can you just tell me for the sake of the reader, your name, your title, and where you're employed?

Anna Stansbury:

Yeah, absolutely. So, I'm Anna Stansbury. I'm an assistant professor of Work and Organization Studies at MIT Sloan School of Management. And I'm part of the IWER at MIT, which is the Institute for Work and Employment Research. So, it's an interdisciplinary group of scholars studying issues to do with work and economic inequality as it relates to work, employment, employment relations.

Scott Cunningham:

Oh, okay. Cool. All right. Well, let's start with an icebreaker. All right.

Anna Stansbury:

Great.

Scott Cunningham:

So, what was the first concert that you ever attended? How old were you and who'd you go with when you went?

Anna Stansbury:

So, that's a hard question, the first one ever and I don't know if I remember the first one ever, which maybe says more about me. An early concert I went to, which I remember, was a battle of the bands at high school. So, I was at school during the indie emo era. So, everyone who was anyone was in some kind of an amateur indie rock band. So, we would have these battle of the bands when we were 12 or 13. And if you were in a band, you got to be very cool and be on stage. And if you weren't in a band, you were in the mosh pit wearing your black and pink stripey pullover or whatever it was we wore. So, I remember that one very vividly.

Scott Cunningham:

That's awesome. Wait, were you in a band or were you in the mosh pit?

Anna Stansbury:

I was in the mosh pit.

Scott Cunningham:

You were in the mosh pit. That's awesome. My first one was Van Halen.

Anna Stansbury:

Oh, cool.

Scott Cunningham:

The For Unlawful Carnal Knowledge Tour that came to Memphis, Tennessee. Memphis had just built this massive pyramid downtown on the Mississippi River. And so, I got to see Van Halen. I did not like Van Halen though. So, I was in this thing where I was unfortunate. All my friends liked heavy metal and I only liked The Smiths and The Cure and REM. But of course, they don't tour, because they're from the '80s. So, anyway, but it was still a lot of fun. It was fun in a different way. It was fun because you were with your friends.

Anna Stansbury:

Yeah. As an experience, right? Having seen Van Halen is an experience.

Scott Cunningham:

Yeah, totally. So, tell me, where did you grow up?

Anna Stansbury:

I grew up in Buckinghamshire, which is when I'm talking to non-British people, I say London, but any real Londoner listening will be really upset if I said London. So, I won't. So, it's between London and Oxford in the UK in the countryside, but still close enough to the city that we feel part of the London world more generally. But I mean I grew up next to a farm, so it was very countryside.

Scott Cunningham:

Oh, wow. Wait. What did your parents do?

Anna Stansbury:

My parents ran an anti-corruption nonprofit together in construction. Yeah. So, they focus on preventing corruption in all its forms, fraud, bribery, extortion, everything else in the construction infrastructure sector worldwide. So, I grew up with a lot of discussion of bribery at the dinner table.

Scott Cunningham:

Oh, wow. Well, what are they like? How'd they get into something like that?

Anna Stansbury:

They were lawyers. My mom worked as a litigator in construction and my dad was trained as a lawyer and then worked in house for big engineering construction companies. They met when they were both doing that and they were actually doing that in Hong Kong and I guess at some point decided that it was time to transition and having been in that world for a long time, had seen or heard of, not seen directly, but heard of been in the world of and understood how nefarious behavior can happen in these big projects. Because big construction projects, there's so much money going around and there's so much scope for problems.

Anna Stansbury:

Big classic of examples being you are a government procuring a massive power station or a massive bridge. There's so many opportunities for a small bribe here or there as to which contractor gets the gig or whether you approve a project that shouldn't really have been approved or the safety standards are relaxed and bribes change hands. Those are the kinds of things where there's a lot of scope. So, my parents having been in that sector for many years understood how it worked and thought that this was an area that really needs to be tackled. So, in the early 2000s, they quit that and went for the anti-corruption stuff.

Scott Cunningham:

Wow. That's crazy. I didn't even really think about that. That's a whole other conversation.

Anna Stansbury:

Yeah.

Scott Cunningham:

So, you grew up in the country.

Anna Stansbury:

Yeah. Yup.

Scott Cunningham:

Oh, okay. What was that like? Did you enjoy that?

Anna Stansbury:

Yeah. I mean, I loved it. I feel like it's a different thing in the English countryside near London than it would be in the proper countryside, because I was still near enough a city. We were on the train and I could get the train into London in an hour. And so, that's very different experience than being very far from everything, but I really liked it. It was a nice mix of you've got quite a sheltered existence. You can spend a lot of time outside. You can spend a lot of time doing sports. I used to do a lot of running, so I did a lot of cross country running. But you've still got the city there when you want to go to the movies or go out with friends or feel like you're having a bit of an adult life as a teenager.

Scott Cunningham:

Yeah. Yeah. I grew up in Mississippi, which is "the country," but I have a feeling it was very different. Yeah. It's interesting. So, I guess where you grew up is almost like a suburb of London, but it's rural.

Anna Stansbury:

Well, so actually that's a great point. So, in London, we have the Green Belt, which is in the '50s I think, but I could be wrong on the timing. They legislated that no new development could happen in a circle around London, which they called the Green Belt. It was in order to prevent urban sprawl, but what it really meant is that we have a very dense city and then I guess a suburban ring, which is quite countryside and full of farms and parks and woodlands and things and then more building around the outside of that.

Scott Cunningham:

It doesn't get suburbanized, the way they're built.

Anna Stansbury:

It's not allowed to. It's got incredibly strict planning restrictions. Then one of the big debates in policy in the UK at the moment is whether to relax that. Should we be able to go in Green Belt? Yeah, but right now, you're not allowed to. And so, that's how I grew up in a house by quite a large town but next to a farm.

Scott Cunningham:

What did that do to housing prices in those areas?

Anna Stansbury:

Oh, yeah. No, not good.

Scott Cunningham:

They're high. They're super high?

Anna Stansbury:

Super high. I mean in London for sure and then even in the areas outside of London, just because we've had incredibly restrictive house building out. You can't sprawl, but we also have really restrictive house building restrictions up. So, you can't go to more land in London in almost any places, because there are very strict restrictions on skylines and on shadow. Tall buildings cast shadow onto other buildings and you're not allowed to do that with a lot of approvals. So, house prices are astronomically high as a result of these restrictions. Yeah.

Scott Cunningham:

So, where do people go? I mean, how does a lower income person survive in London if they can't even move far away on the train line?

Anna Stansbury:

Yeah. It's not good.

Scott Cunningham:

It's hard.

Anna Stansbury:

There's some affordable housing, but not enough. Some people just move really far out and there are some parts that are more or less affordable than others based on how far out you are and how inconvenient the train is. But it's funny, I'm actually doing some work right now on regional economic inequality in the UK. One of the aspects we are looking at is pay premium in London versus in other parts of the country. We find that there's a big London pay premium even for lower income people of the same qualification level relative to the rest of the country, but that's completely eroded by housing costs. There's actually a net financial disadvantage for London versus almost anywhere else in the country, unless you're in a really highly paid job.

Scott Cunningham:

Your compensation is higher in London. Your net compensation is lower.

Anna Stansbury:

Yeah, exactly, if you are a renter. If you're an owner, obviously, it's very different, because [inaudible 00:13:39] if you're a renter. Yeah.

Scott Cunningham:

You got that data over time. Has that changed over time?

Anna Stansbury:

We don't have it over a super long time series unfortunately. I think we've only got it since about 2012 and you do see it worsening since 2012, because there's been a big increase in house prices. Well, ideally, we'd have it for 40 years and we don't have that yet.

Scott Cunningham:

Yeah, but it exists. You've got to make it. That data exists.

Anna Stansbury:

We're trying to figure this out right now hopefully.

Scott Cunningham:

Okay. I don't want to take your project away.

Anna Stansbury:

No, you're not taking it away. I'm just hesitating, because I'm getting anxiety at the thought of whether it does exist because we do want to.

Scott Cunningham:

So, when you were a kid in high school, what would you have been doing? What were your hobbies that you enjoyed outside of academics?

Anna Stansbury:

Yeah, I did a lot of hobbies. I did a lot of sport. I did a lot of music and I did a lot of theater. Well, musical theater. That's got a particular reputation in the US. I was in all the school musicals and in the orchestra and in the choir. I did track and field and field hockey and netball, which is a British game like basketball, but you don't dribble.

Scott Cunningham:

Yeah, netball.

Anna Stansbury:

Yeah, netball. It's a great game. And I really wish it was played more widely, but yeah, you just pass and then you pass, pass, pass, pass, pass, and shoot. So, it's basically very similar to basketball and that there are two nets and there's ball, but you don't dribble.

Scott Cunningham:

Is there a professional league?

Anna Stansbury:

I think so, but only a few countries play. So, there's definitely a national team in the UK and there's national team in a lot of other countries primarily that were former British colonies, because I guess that's how the sports spread.

Scott Cunningham:

So, you don't have any layups. You probably don't have any layups.

Anna Stansbury:

No layups. No.

Scott Cunningham:

You have long shots?

Anna Stansbury:

Yeah, exactly, penalty shot type things.

Scott Cunningham:

Oh, that's interesting. So, you can't move.

Anna Stansbury:

No.

Scott Cunningham:

It's almost like Ultimate Frisbee almost.

Anna Stansbury:

Yeah. I think it is like Ultimate Frisbee with a ball. Obviously, you can bounce the ball so you can still catch it on a bounce.

Scott Cunningham:

Oh, you can pass it on a bounce.

Anna Stansbury:

It would be pass bounce.

Scott Cunningham:

I see. Oh, that's interesting. Can you find it online? I guess you can find it on YouTube.

Anna Stansbury:

Yeah. Yeah. It's a good game. It's fast.

Scott Cunningham:

I'll have to look. I bet there's a thousand TikToks of netball, #netball. Okay.

Anna Stansbury:

[inaudible 00:16:01]. Yeah.

Scott Cunningham:

So, what were your academic interests when you were in your grade school, high school years?

Anna Stansbury:

So, I was into languages quite a lot. I love languages. In England, everyone studies French pretty much in school. Everyone has to, because I guess it was there next door. And then my school also, you had to study another language. I did German and then I also did some Spanish and did a bit of Italian and a tiny bit of Russian, which I've forgotten all of. But I love languages. So, I did a lot of that. And also, economics honestly from quite an early stage.

Scott Cunningham:

Really?

Anna Stansbury:

So, in the UK, you take a set of exams at 16, which you take 10 to 12 subjects at 16 and then you take only 3 or 4 subjects after 16. Those are the A levels and economics was one of my A levels. So, I loved economics, math, and languages. That's what I specialized in.

Scott Cunningham:

Wait. So, you had good economics in your high school? Your teachers were good?

Anna Stansbury:

Yeah, not all schools offer it. My school had economics as one of the A levels. Actually, honestly, it formed a lot of how I thought about econ, because it was good. It wasn't hard math. It was graphs. We did it graphically with equal intuition, but it was good intuition. So, we thought about perfect competition versus monopoly versus oligopoly. You have different curves and you think about dead weight loss. You think about price and marginal cost. We had a bunch of interesting macro. And I remember because in this last two years of high school, 2008 to 2010, which is obviously what a time to be studying macro, it was the beginning of the great recession. It was the financial crisis.

Anna Stansbury:

During this period, we had bank bailouts in the UK. We had the UK chancellor talking about massive increases in government debt, which reversed the whole macro consensus of what the debt to GDP ratio should be and what government should be spending on. So, it was a really cool time to be studying it. And my teachers were really good at bringing it in and bringing in what's going on in the world and how should we think about that through the lens of what we are learning in our textbooks. It was a fun course.

Scott Cunningham:

That's cool. That's amazing. So, then you go to Cambridge. Was economics immediately something that you were interested in?

Anna Stansbury:

It had to be, because in our system, you have to pick the subject you study before you go to university.

Scott Cunningham:

Oh, wow.

Anna Stansbury:

So yeah. So, we don't choose our major when we're there. In almost all UK degrees, you apply with your subject already. So, you apply in the fall of the year before you go to college. In that application, you've picked your subject and you've written an essay about your subject and your teacher's recommendation or whatever is about your capacity.

Scott Cunningham:

Nobody can change their major.

Anna Stansbury:

It's hard. It's hard. So, I'd applied to study economic already when I was 17.

Scott Cunningham:

Any British economics major that I observe compared to an American economics major, I'm looking at someone that is known even before they started college.

Anna Stansbury:

Yeah, yup. Has known before they started college, and also, for most economics degrees has only done economics.

Scott Cunningham:

Has only done economics.

Anna Stansbury:

In most unis, you can't take other courses, which I was actually was quite frustrated about Cambridge, because I wanted to get other perspectives, but it was very difficult to take a class from another department and have it count for credit.

Scott Cunningham:

Wow.

Anna Stansbury:

So, you're doing economic history or you can do the political economy. You can do the maths for economists, but you are within the economics department. You're within the framework of the economics degree your whole time.

Scott Cunningham:

Wow. Wow. That's really interesting, because the thing that I feel like I get really frustrated with is that if you ever decide to get a PhD in economics, it almost really is better for somebody who knew from the very beginning, because they have to practically get a math major. I didn't decide I wanted to become an economist until after I graduated college. It sounds great, you get all this fluidity to self-select, but for something like econ that has so many fixed costs for graduate training, I guess the whole thing is that a lot of people know in Britain, they still don't know that they would love being an economist.

Anna Stansbury:

Yeah. I think that's true and I think it cuts both ways, because I agree with you, the way the system works right now, it's a very windy path from undergrad to an econ PhD, especially with these courses that you have to take and got good grades in math basically. And in the UK system, I think it cuts both ways. Econ is a very big major. So, a lot of people will just take it. And then if you've done it, it's trained you quite well to apply for a PhD.

Anna Stansbury:

I mean the one at Cambridge, for example, there was a lot of math. It was very mathematical. It was very theory heavy. And so, it trained you well that if you then decided in your third year of your degree, I want to do a PhD, you're quite well set up. On the other hand, if you didn't know about economics at 17 and didn't apply to take it, it's very unlikely that you'll ever be able to take it, because it's very unlikely that you'll shift majors once you're already at college. It cuts both ways there.

Scott Cunningham:

Which means the system has got to build a lot more of all these majors into high school.

Anna Stansbury:

I think so.

Scott Cunningham:

If you're having to do this for everything, then it seems like you've just got to somehow pump all of the different majors really earlier, earlier, and earlier. I mean, what if you wanted to do archeology or anthropology? You graduated high school knowing just like you did it.

Anna Stansbury:

Yeah. You got to pick it. I know it's funny. I like the US system's flexibility that you get to explore a little bit more before you specialize, because for us, I mean we already specialize at 16. You pick three or four A levels at 16. So, you are already cutting off almost all of your other intellectual interests. I mean, it's good in the sense that if you know what you love, which I did. In retrospect, I would've liked to have done more science, but I didn't like it at the time. So, I was glad to stop it and just do history and econ and maths and languages. But if you are a bit more of a generalist, so you're not sure what you like, it can be quite restrictive quite early.

Scott Cunningham:

Yeah, yeah, yeah, yeah. So, you majored in econ. What'd you like? What were the classes that you liked at Cambridge and which professors did you like? Who are some professors you remember really fondly?

Anna Stansbury:

Yeah. So, my macro professor, Petra Geraats was amazing. She is a Dutch macro economist at Cambridge who focuses on monetary policy and particularly central bank transparency. She was one of my main professors, because at Cambridge, we have lectures, but we also have tutorials which are supervision, which are small group sessions. So, she was my macro supervisor for three years and she was just incredibly good at drilling into how macro works and thinking about the intuition. She'd always say, "Don't describe it through the graph. Describe it as you would to your Aunt Betty who doesn't know anything about graphs or derivations."

Anna Stansbury:

And so, she was really good at getting us to think about, "What is the intuition behind a fiscal stimulus, a monetary stimulus. How do we think about monetary policy and how it works?" I feel like that just set the groundwork for me for years about how to think about macro. Another professor who I loved and the class I loved was Victoria Bateman who's an economic historian. So, one of the unusual things about the Cambridge undergrad in econ is there's a mandatory economic history of the United Kingdom course in your first year. And it's from 1750 or something until 1939. So, you have three blocks. You have early industrial revolution, late industrial revolution, up to World War I, and then the interwar period.

Anna Stansbury:

And so, you do so much interesting economic history and Victoria Bateman was my supervisor for that course. You're doing, "Why did the industrial revolution take off? Why in the UK, not elsewhere? How was it stimulated?" And then you're doing in the interwar period, "What happened at the Treaty of Versailles? What happened with the gold standard, international debt, defaults, globalization?" So, you get this amazing overview of world economic history and the big debates. And that was just so fun as an 18-year-old to dive into.

Scott Cunningham:

Oh, I bet. That was wonderful. I feel embarrassed. Was Keynes at Cambridge?

Anna Stansbury:

Keynes was at Cambridge. Yup.

Scott Cunningham:

That must have been so neat to just walk around where he was.

Anna Stansbury:

It was crazy. I know. Also, my college at Cambridge was where Alfred Marshall was, who was the founder of so much economics. And then there was people like Kaldor and Hicks and Robinson and really had a lot of the great economists coming out of it, which was cool.

Scott Cunningham:

I bet that was neat. I bet taking a class like that history of English economics, being in this school where all of these great economists had been must be... I mean, I guess you get used to anything, but that still just seems really cool.

Anna Stansbury:

Yeah, I think it is. I look back at myself at 18 and think, "You should have appreciated a little bit more how unusual this was." Also, just being in a place that was 800 years old. You go, "Okay, this is cool. This is pretty." And I wish I'd absorbed a little bit more what that weight of that history meant and how exciting it was, but it was amazing. Yeah.

Scott Cunningham:

Oh, that's cool. So, then you leave. So, it sounds like macro goes back far. You've been drawn to macro questions a little bit for a while.

Anna Stansbury:

Yeah.

Scott Cunningham:

Also, labor. Was labor also stuff at Cambridge that you were finding yourself drawn to?

Anna Stansbury:

That's a good question. I feel like that was a later interest of mine honestly. I was always interested in macro, because I was always interested in... Well, really what drove my interest in economics from the beginning was being interested in questions of poverty and inequality and unemployment and fairness and those kinds of questions. So, I was really interested in development for a long time, development economics. And I was interested in macro and finance really very much shaped by the financial crisis being the defining of public social economic event of my teenage years. So, you grow up reading about recessions and bank bailouts and you see pictures of people taking their boxes of stuff out of Lehman Brothers after it went bankrupts.

Anna Stansbury:

This becomes what you're really interested in investigating. And then I think I got more into labor as I was thinking about inequality and unemployment and poverty in the context of advanced economies, particularly the US and the UK and thinking about, "Well, how is this portion of inequality determined? Where do these massive gaps in pay for different groups come from? To what extent is this determined by the market?" That's how got more interested in that side of things.

Scott Cunningham:

Yeah, yeah, yeah, yeah, yeah. I mean, I don't want to draw too much out of this, but I mean, even your parents being so interested in corruption within a sector, I guess that's not really consistent with perfect competition exactly or it does call for interventions or it calls for people. It's interesting that your parents choose to go in and try to address that. I don't know. I don't want to overstay it, but I could see that social justice ethos in your story a little bit.

Anna Stansbury:

No, I think that's right. I think that's right. As I reflected on where I came from a little bit more, I think that's a big part of it. And a big part of it is a skepticism and concentrations of power and belief in the power of civil society and government regulation to combat it somewhat, which probably isn't the throughline. Yeah.

Scott Cunningham:

Yeah. So, okay. I want to keep talking about that, but I got to save that stuff for in a minute. So, you end up taking a route into your PhD that is not as typical. You go and get your Master's of Public Policy at Harvard Kennedy School. Can you tell me why you ended up doing that? Did you know that you were going to end up doing a PhD eventually?

Anna Stansbury:

No. No. So, I never wanted to be an academic. It was just never on my radar as a career path. I don't know if it was on my radar because I didn't really know what it was like or I didn't want to do it, but it just wasn't. I was always really interested in the public policy side of things, going back to this, I guess, social justice type streak. I mean, I studied economics because I wanted to make the world better and I thought economics was a way we could understand how to do that. And then while I was at Cambridge, I was very involved in a student society called The Wilberforce Society, which is a student think tank.

Scott Cunningham:

Wilberforce?

Anna Stansbury:

It's called Wilberforce.

Scott Cunningham:

Yeah. That's the guy that's ended slavery in England.

Anna Stansbury:

Yeah, exactly. He was a Cambridge alum. So, the people that founded this group named it after him as someone that thought a lot about important things and then did good things with it. So, we were a student think tank. And so, I spent a lot of time writing policy papers, trying to engage with policy and media on this stuff. And I really wanted to go into public policy, into some job maybe in government or maybe in an international organization, maybe doing something in the private sector but as a social enterprise or a social impact finance type thing. So, I went to the Kennedy School with that in mind, thinking I love public policy. I have a very strong academic training in economics.

Anna Stansbury:

I feel like I would like to be complimented with more of the practical staff, more politics, more soft skills. That's what the MPP was going to offer and also just getting the experience to live in the US and go to Harvard and meet people from all over the world. I mean, it just seemed amazing. So, I went straight there after my undergrad, thinking that I would do this two-year master's and use that as an opportunity to explore different career options in probably international development, social impact stuff.

Anna Stansbury:

But while I was at the Kennedy School, I did some of that exploration and loved it, but wasn't necessarily sure that those were my comparative advantage. I did some internships. I did some classes and also ended up doing some econ classes with Ricardo Hausmann, with Larry Summers, and loved them and realized that maybe-

Scott Cunningham:

Can we pause real quick?

Anna Stansbury:

Yeah.

Scott Cunningham:

What would it have looked like do you think if you would've said my comparative advantage is to not be an academic at Kennedy School? What was it? What's the signal that you noticed that you weren't getting? What would it have looked like?

Anna Stansbury:

Yeah, it's a great question. And I don't know if maybe it was just my idiosyncratic experiences that didn't give me that signal and if I'd have had different ones, I would've gone on a completely different path. But I think for me, it was just that I hadn't found a day-to-day work set of tasks that I loved. I was quite happy to do a lot of the tasks that I was doing, but I didn't love it on a day-to-day basis. This was just me and just personal to me, but I also felt quite strongly that when I was doing some of my internships in international development, I was learning a lot, but I wasn't sure how much I was contributing.

Anna Stansbury:

And I worried that there's a surface of somewhat educated, well-intentioned people from rich countries who want to help but maybe don't actually have that much to add relative to a lot of expertise in developing countries. It's really that expertise and that local capacity that should be supported, rather than flying in foreign experts. I wasn't sure how I could fit into being part of the solution there. So, that was causing me to question how exactly I wanted to contribute and what exactly I wanted to do. And then I think I saw positive signals of my comparative advantage from taking econ classes and realizing that I love the analytical process.

Anna Stansbury:

I love figuring out some big puzzle about the world and thinking it through. I realized that I loved teaching because I was a teaching assistant and found that I loved that. I had this moment when I was on my bike once. So, I was biking home from teaching, being a teaching assistant. I was like, "I love teaching. I loved doing this." I was a research assistant for Larry Summers a little bit on a project on the UK. I love doing this research. I'm so interested. I wish there was a job that I could do this and then realized there was. So, that helped reorient my career a little bit.

Scott Cunningham:

Yeah. I mean, I guess one of the signals that I just heard you say, which I don't think it is even meaningful to a lot of people, is this desire to have impact, right?

Anna Stansbury:

Yeah.

Scott Cunningham:

I mean, some people would be like, "Impact, I don't know. I do it because I like it or I do it because X, Y, Z," but you're wanting to have impact. Is that what you're saying?

Anna Stansbury:

Yes. Yeah. I think that's a good point. Exactly. I like the process, but I don't like it enough to do it on its own without a reason. For me, the reason is that I hope to have positive impact with my research and my teaching.

Scott Cunningham:

Yeah, yeah, yeah, yeah. Okay. So, you're seeing some economists, because there's a bunch of economists that are teaching at Kennedy in the Master's of Public Policy and two of them is Ricardo Hausmann-

Anna Stansbury:

Yeah.

Scott Cunningham:

He's still alive. Is that right or no?

Anna Stansbury:

Yeah.

Scott Cunningham:

Okay. Ricardo Hausmann and then Larry Summers. So, did you end up having conversations with them or something in those classes that is pushing you forward a little bit?

Anna Stansbury:

Yeah. So, I love the classes. And then honestly, Larry Summers was an amazing mentor to me and still is, but essentially, he had a small seminar class at the time. It was called inside government. It was interesting economic policy topics in US government policy, financial crisis, to bail out health insurance, whatever they were. And we would write essays for the class. I remember writing essays on advocating an 80% top marginal tax rate and advocating 4% inflation target. I don't know. I was feeling quite radical with my proposals and I wrote these essays. He had some policy of getting his TA to contact all the people that did well in the class and say, "Hey, why don't you have a meeting with Professor Summers?"

Anna Stansbury:

So, if that contact hadn't happened, I wouldn't have ever met with him. I'm not the person and I wish I had been that reaches out to professors to meet with them. So, I did. I went and met with him. As he did with all the students, chatted. What's your aspirations. What's your background? What do you hope to do? And he said to me, "Have you considered doing a PhD in economics? You sound like you're well qualified for it, done great in the class." That suggestion planted the seed. And then he said, "Well, if you are interested in this, be my RA, be a TA for the class that I teach with Martin Feldstein and Jeff Liebman and Kate Baker," which was a great class that I ended up TA-ing a couple of years, "and see if you like it." So it was that intervention really that changed my trajectory.

Scott Cunningham:

Oh, wow. Wow. That's great. That's neat. So, did Larry Summers become your advisor when you were at Harvard? So, you end up going and getting your PhD at Harvard. How many years were you there?

Anna Stansbury:

Exactly. So, I was two years in the MPP. Then I worked for a year as an RA and TA for Ricardo Haussman and for Martin Feldstein between MPP and PhD. And then I did my PhD.

Scott Cunningham:

The great team. Wow. That's really cool.

Anna Stansbury:

Yeah, that was amazing. It was a wonderful year. And then I did my PhD 2016 to 2021, so five years in the econ department. Larry Summers and Larry Katz were my main advisors.

Scott Cunningham:

Oh, wow. That's great. So, you just graduated pretty much?

Anna Stansbury:

Yeah, I graduated a year ago.

Scott Cunningham:

A year ago. So, you've been at MIT a year. That's awesome.

Anna Stansbury:

Yes.

Scott Cunningham:

So, what did you end up writing your dissertation on?

Anna Stansbury:

It was called, "Essays on Power in labor Markets." So, I had three essays and it was really all topics to do with power and institutions. So, one was a paper on employer concentration. So, there are few employers in a given labor market. How much does that suppress wages? Does that give them monosomy power? Second paper was with Larry Summers on the decline of worker power in the US and trying to quantify its macro-economic implications. And then the third paper was pivoting a little bit and was about minimum wages and union organizing protections and firms' incentives to comply with the law basically and thinking about how the financial penalties are applied in practice and do they incentivize firms to break the law or comply with the law.

Scott Cunningham:

Yeah. Okay, perfect. Now that we're moving into research, this is great. I love all of this, but this is perfect. I couldn't have planned it better. So, here's what I was thinking. The major themes I was looking across your papers and reading three things is inequality in the labor markets appears to be a big part of it, monopsony, the minimum wage, but then there's also this macro focus. I can't quite put it into words. So, I'm hoping that it'll be clear to me the way all these things work together as we're talking.

Scott Cunningham:

So, this paper with Larry Summers, I don't want to summarize it, because I in the past on the podcast have talked too much. It seems like you start with some strange empirical regularities. I'm going to call them strange because you're going to explain them. Usually, that's the way I always think of it. These empirical regularities between worker compensation, firm profitability over a 30-year period of time. Before we even get into the explanation, there's a set of facts over a long stretch of time. What are they?

Anna Stansbury:

Yeah, absolutely. So, the big facts that we are trying to reconcile are number one, a big rise in income inequality in the US since early '70, early '80s, depending how you time it. One dimension of which is the decline in the labor share of income. So, share of income going to work is falling. Share of income going to capital bonus is rising. Fact number two is the rise in-

Scott Cunningham:

How big is that change over 30 years?

Anna Stansbury:

Depending exactly how you measure it and from when you measure it, it could be about five percentage points. Our measure is the non-financial corporate sector compensation share. So, we're just looking at the corporate non-financial private sector basically. The share of value added in compensation fell by about five percentage points from the early 1980s to the late 2010s.

Scott Cunningham:

Real wages are rising, but the share is falling. I know there's a lot of energy too though.

Anna Stansbury:

Exactly. Yeah. The average real compensation hasn't kept up with total productivity.

Scott Cunningham:

Yeah, yeah, yeah. Right, right, right. Let me ask something. If you have rising labor productivity, just in the traditional neoclassical model, if you've got rising factor productivity in labor markets, could you get that decline in the share or is it guaranteed that it would also keep concepts, something to do with the production function, right?

Anna Stansbury:

Exactly. It's how you specified the production functions. So, one of the Kaldor facts that motivated our use of a Cobb-Douglas production function as the baseline was that the shares of income of laboring capital had been roughly constant over the previous decades when he was establishing the Kaldor facts. And so, in your Cobb-Douglas production function, the factor shares are set by the coefficients, K to the alpha L to the one minus alpha. But if you have a production function, you can specify a production function where that's not the case and the factor shares can change and then they can change as a result of non-factor neutral technological change.

Scott Cunningham:

Non-factor neutral.

Anna Stansbury:

Yeah, as in technological change that augments one factor rather than the other. If you have a production function that's not Cobb-Douglas, then that can change the factor shares.

Scott Cunningham:

Okay. Okay. Okay. So, number one, workers are getting less of the total surplus associated with output. That's the way I think about it.

Anna Stansbury:

Exactly. Exactly. That's fact number one.

Scott Cunningham:

We got together. We make some gadget. We sell it on the market. It was historically 50/50, and now, it's like 60/40.

Anna Stansbury:

Yeah.

Scott Cunningham:

You're watching it fall.

Anna Stansbury:

And we're watching it fall. And the debate about how much it's fallen is pretty vibrant, but I think it's fallen at least a little bit. It was pretty stable before that for a number of decades since Keynes began in the '40s.

Scott Cunningham:

Yeah. So, Anna, is this a completely different debate than inequality? Before we get into the more of these facts, I usually think of inequality as just the distribution of wages across the population or the 1% growing or something like that. But it seems like I haven't really thought as much about the capital labor shares.

Anna Stansbury:

Yeah. So, I think when we talk about inequality, we're often talking about different aspects of the beast. I like to think about it that there are two big picture inequality questions. One is within labor income inequality and how that's changed. That's been huge because we've seen the rise of very top income earners. Well, we've seen two dynamics going on within labor. We've seen the college, non-college divergence, particularly in the '80s and '90s. And then we've also seen the top 1% or top X percent of labor earners really skyrocket, your chief executives and other top executives, your lawyers, your other professional service people. So, those are the two within labor dynamics.

Anna Stansbury:

And then you've also got the labor on average versus capital, which is mostly shareholders dynamics. And then you've got something going on with top 1% people, which is a bit of both, because a lot of top 1% income is labor, but a lot of it is capital. Some of it is not entirely clear if it's labor or capital, because they're an owner manager of a large company or they're a partner in a hedge fund. How much of that is labor and how much is capital.

Scott Cunningham:

Well, I can see a little bit better all the things that macro-economic theory is bringing into you focusing on these labor questions. I definitely see this merging of the two fields in the way in your research.

Anna Stansbury:

Yeah, I think so. And I think there's a lot of people doing really interesting work at this intersection. I mean, to understand any of the big social questions about what you do about labor markets, you need the general equilibrium and the general equilibrium is what macro as a field is about. So, having that interplay is really important, I think.

Scott Cunningham:

Right. Right. Okay. So, following labor shares. So, what was the other one?

Anna Stansbury:

Fact number one, falling labor shares as a part of more broadly rising inequality. Fact number two, rising corporate profitability and valuations. So, ways you might measure that without a corresponding rise in the safe interest rate. So, you've got rising stock market values. You've got Tobin's Q, which is a measure of the market value over the replacement value of capital rising. You've got corporate profitability as measured is rising relative to the safe rate of return.

Anna Stansbury:

And you've also got this big siloized fact of rising markups that a lot of people were talking about and still are talking about in macro and IO, where you've seen the markup of price over marginal cost for a lot of industries has risen. And so, all of these have tied up in the same phenomenon of rising possibility. And then the third set of facts and this was before the current era was the decline in average unemployment in the US without any noticeable uptick in inflation.

Scott Cunningham:

Say that again, say that one more time.

Anna Stansbury:

The decline in average unemployment without any noticeable uptick in inflation. So, if you believe in some theory of the world where there's a natural rate or a narrow, you expect that low unemployment at some point will lead to higher inflation.

Scott Cunningham:

Almost like a Phillips type reasoning.

Anna Stansbury:

Exactly, like a Phillips relationship. But we saw this big decline in average unemployment from the early 1980s to the late 2010s. And there was no meaningful inflation throughout the 2000s and 2010s. Now, we're in a little bit of a different world. We can debate whether some of it is dynamic, but that was the third set of facts.

Scott Cunningham:

We saw that declining employment because we saw a lot of male labor force participation rates falling. Is that not accurate?

Anna Stansbury:

Yes. So, we are talking about the declining average unemployment rates.

Scott Cunningham:

Unemployment rates.

Anna Stansbury:

But you're right that the employment rate dynamic muddies the waters a little bit. So, you saw average unemployment in the '80s, 8, 7%. You saw average unemployment by the late 2010s in the 3s and 4s, but you did have this big decline in male employment at the same time. And so, the question of whether that was concealing unemployment is an important one.

Scott Cunningham:

Okay. I keep interrupting you. Are there more facts? There's more, right?

Anna Stansbury:

No, those are the main facts.

Scott Cunningham:

Those are the ones. What the heck's going on? You have some opinions. So, what is going on with this?

Anna Stansbury:

Yeah. So, I'll frame it as number of theories as to what explains each of these facts or these facts together. So, if you're looking just at the labor share, the decline in labor share of income, some people attribute that to technology and automation or a race between technology and education. Some people attribute it to globalization. Some people attribute it to rising corporate power and some people attribute to declining worker power. Those are the four big theories.

Scott Cunningham:

Could you get that with just increased factor productivity of capital, like computers or something? I don't know what exactly that would be, but just exploding productivity of capital. Wouldn't that give you some of this?

Anna Stansbury:

Yeah, under some production functions and it depends on your assumption about that production function. Because again, if you've got a Cobb-Douglas, then capital getting way more productive is actually also good for labor because the marginal products of labor is also higher. So, it depends on what you're assuming about the elasticity of substitution between labor and capital essentially. But yeah, there are some worlds in which that could be the driving force. Exactly. So, there's a big debate about that. There is a number of papers that argue they take the labor share fact, declining labor share.

Anna Stansbury:

Then they also take the rising corporate profitability facts and they say, "Look, this declining labor share stuff, this could be compatible with globalization, technological change, automation, all these market forces type things that change the marginal product of different groups and therefore change their pay." That's essentially what it is. Change the margin product of labor relative to capital under some assumptions about production functions, it changes their pay. Those are competitive explanations, but we've seen this big rise in profitability and markups and valuations that can't be explained competitively. Therefore, the explanation must be a rise in corporate power in product markets. We saw this big rise in corporate concentration over this period.

Anna Stansbury:

The number of firms in a given industry has decreased. So, maybe what's going on is market power and markups. That's explaining the declining labor share, because capitalists, they're becoming more profitable because they're becoming more monopolistic. That's also explaining these profits. And so, then our paper came in and said, "Actually, all these facts can be reconciled just as easily with a decline in worker power as it could with the rising corporate power, but we think there's a whole bunch of other evidence that is more consistent with the decline in worker power than it is with the rising corporate power."

Anna Stansbury:

So, we are saying, "The focus on power is probably right, but we should be shifting our focus on power to the labor market side of things rather than the product market side of things."

Scott Cunningham:

So, when you're talking about worker power, you are beginning to tap into the monopsony theory. You're saying other people were almost more focused on monopoly, because they were saying, it's this monopoly issue that might be explaining some of this. And you're saying, "We think it's got elements of monopsony." Is that what you mean?

Anna Stansbury:

Almost, except that I'm a little wary about calling it exactly monopsony and the reason for that is we definitely want to focus on the worker power side of things. I think monopsony has a lot to do with that as a baseline characterization of the labor market. But I think even if you had a world where the labor market was not monopsonistic, it was some perfectly competitive labor market and you had a product market that was monopolistic and the monopoly power didn't change in the product market, but there were strong unions in the past and the unions declined.

Anna Stansbury:

You can imagine a world where okay, past world was monopolistic product markets, generates lots of rents, lots of profits. These monopoly profits are shared between unions and capital owners. Unions then decline. Nothing changes about the underlying monopoly of power but it goes to capital. So, that's not a monopsony story, but it's a worker power story.

Scott Cunningham:

Yeah, yeah, yeah. I see.

Anna Stansbury:

So, it could be that story or it could be a monopsony story. Yeah.

Scott Cunningham:

That's all I was wondering is I actually didn't know how you moved between the concentrated product market and it wouldn't automatically imply some symmetry in the input market. I don't know. It's so funny. I feel like embarrassed how much of micro I constantly am forgetting. I don't know. I taught it for 15 years, the grand micro. So, so much of economics, you have to hold all this stuff simultaneously, how all these are working together. I just constantly am forgetting.

Scott Cunningham:

So, when I think about worker power, I always am thinking of it as these old Nash bargaining models. I don't know how helpful they are, but I always think about worker power in terms of, "Well, if you don't pay me, I'm going to quit." And that's credible insofar as the employer can observe your outside option. And usually, that is the credible threat position. Is that at all going on here? There's some declining credible threat. Is that a helpful way to think about any of this or that's not really helpful?

Anna Stansbury:

So, I think it is. I'm still open about exactly where the work of power is fitting in and which types of work is fitting where, but I like the Nash bargaining framework as an intellectual architecture. I think there are two areas where worker power can fit into it. Well, actually, in some sense, it's three. One is you've got the firm's outside option is the max they're willing to pay, right? The worker's outside option is the men they're willing to receive. And then maybe there's some surplus between the two. So, one aspect that determines pay is the workers' outside option and that could be getting worse or getting better, but that's the one you are talking about. If I don't get what I want, I quit and the threshold which I quit is my outside option.

Anna Stansbury:

Then there's the firm outside option, which is how easy is it for the firm to replace me in some sense. And so, I think one aspect of changing worker power that's been induced by automation and globalization is it's easier for firms to replace some kinds of workers than it was before. So, the firm outside option changes. And then if there's any surplus in the middle, that's where I think things like union bargaining power matter, because they might not affect your outside options, but they might affect how that surplus that's created by the matches split. So, I think actually the Nash framework's quite useful just to think about which types of worker power fit where and which ones have changed.

Anna Stansbury:

And I think the surplus splitting power has clearly changed because unionization has declined so much. The firm outside option side may have changed as a result of technology and globalization. And then the work outside option, I think it's not super clear if it's improved or got worse, because you could think of the rise of the internet and things as making job search easier.

Scott Cunningham:

That's on my thing. It's my 14th question here.

Anna Stansbury:

Oh, no. Sorry.

Scott Cunningham:

Go ahead. No, keep going.

Anna Stansbury:

Yeah, no, you can think about that as having made job search easier, right? It's much easier to find a good outside option now if you can look on LinkedIn or look on one of these boards.

Scott Cunningham:

Yeah, but it's not. Because that's what I was going to ask you, because you got this paper with Schubert and Taska on employer concentration and outside options. I wrote down, it seems like your paper on employer concentration and outside options is actually getting at this worker power hypothesis. Is that right?

Anna Stansbury:

So, we are looking at really the monopsony outside option.

Scott Cunningham:

You're looking at the monopsony part. Yeah.

Anna Stansbury:

If we're thinking about it being determined, these three portions, we're looking there at the, "What is happening to the workers' outside option piece?", rather than the rent splitting piece induced by unions or something like that.

Scott Cunningham:

This is what I find so difficult to understand. Although, honestly, I don't find it difficult to understand, but I feel like my personal reasons can't be the explanation. So, why is monopsony relevant if I can just move? We talk about the labor market as though it's like this local area, but then when we have platforms like LinkedIn and the search costs for looking for a job, they seem like they're low. I mean, maybe I'm completely wrong and somehow LinkedIn has made it harder and there's all this congestion, but it seems like I know about jobs all the time.

Anna Stansbury:

Yeah.

Scott Cunningham:

I got Joe, I got LinkedIn, I got a billion ways. I hear about things. I got my network, all this internet stuff. All I got to do is move to another place, right? I mean, I had an opportunity to do that. I did not ultimately take it because of family stuff. But a lot of people, that's what they do. So, why is it all of this stuff making monopsony less relevant? Because I get the feeling it's like either a bunch of economists are focusing on the wrong topic, but there's an awful lot of attention to monopsony going on. So, it seems like there's something going on and I'm just curious what you think about that.

Anna Stansbury:

Yeah. No, I mean, I think this is a really big debate. And so, on the point about moving, yes, clearly, people can move employers and they can move places. And so, that must impose a limit on the degree to which a firm can suppress wages for any given worker. And the more mobile a worker is, the smaller that limit is. I think what I would say is what I think the bulk of empirical research is adding up to tell us is that even though search costs are relatively low, switching costs are relatively high.

Scott Cunningham:

It's the switching costs.

Anna Stansbury:

As you said, it's hard to move if you've got family commitments. It's hard to move if you've got a mortgage. It's hard even to move employers if you've got a care schedule that you need to switch around.

Scott Cunningham:

That's changed over time. That's the part I understand. Some of this stuff feels like those are constants. So, when you're telling me something's changing over time and those are the explanations, I think, "Well, that's always been hard, right?" It's harder now though.

Anna Stansbury:

No, this is what I was going to say. The second point is I don't think monopsony has changed over time. I don't think there's any evidence to say it's got worse. My take on the labor market is very similar to a paper by Erickson and Mitchell in 2007, where they had a great explanation, which is that the decline in worker power has exposed the latent monopsony of the labor market. So, there's some underlying nature of the labor market that is intrinsically frictional monopsonistic. That mobility allows you to move at a given degree, but there's a cost. And so, between the salary and the cost of moving, there's some wiggle room for firms to accept some kind of monopsony power generated by these frictions and switching costs and search costs and everything else.

Anna Stansbury:

I have no reason to believe that's changed much over time. You can construct some stories where non-competes and occupational licensing have made things more frictional. You can construct other stories where the internet has made things less frictional. So, hard to say. I think it's a toss-up. But I think what has happened is 40 years ago, a quarter of private sector workers were in unions and a whole bunch of others had a credible threat of being in unions. There were other mechanisms that gave workers more bargaining power in their workplace and their firm. They hadn't been the fissuring of the workplace as much and all this stuff.

Anna Stansbury:

And so, there was more formal and informal power for workers inside companies, which exerted a countervailing force to this underlying latent monopsony power. And as that worker power declined, it exposed the latent, unchanging, monopsonistic nature of the labor market. So, that's my personal take on the time series.

Scott Cunningham:

Yeah, yeah, yeah. Unions. It's so cool. All right. So, then I'll be cynical.

Anna Stansbury:

Yeah, please.

Scott Cunningham:

Remote work from home, right? So, here's a completely cynical take. If I am watching firms gleefully promoting work from home, I almost am inclined to think that they've figured out a way to use it to create higher switching costs so that they don't leave, so that they can extract more of the rent. I was curious, to what degree do you think that this remote work from home might appear to be advantageous to the worker and in fact, may actually just be like what you were saying a little bit with the London premium? Which is on this one margin, there's this improvement, but on this other margin, is there something about it that I'm not guessing? Because it looks like a free lunch a little bit to the worker. You like think about London, right? It's so expensive to live in London.

Scott Cunningham:

Well, I'm going to live really far out, beyond the green area that you said where it's really cheap. And I'm going to get that London pay, that premium, and work from home. The fact that any firm actually wants to do this is just giving me a little bit of some alarms.

Anna Stansbury:

Interesting. Well, I'm not sure I understand what the mechanism will be, how they extract the rents.

Scott Cunningham:

No, I don't know either. This is the horror story thing. Yeah, there's something nefarious. Why would they want to do it?

Anna Stansbury:

I think I'm more optimistic on remote work for most people in that I think it's a benefit people really value. And if you look at Nick Bloom's work and other people's work on remote work, my colleague, Erin Kelly, people really value remote work. They're willing to pay a lot in terms of salary equivalent for having the option for remote work and for flexible work. And if you add on then the cost of living in big cities versus outside big cities, you're going to value it even more if you're able to leave, because then you're not paying a whole bunch of money and rent for something you don't intrinsically value, assuming that there are a lot of people for whom living in the big city-

Scott Cunningham:

Here's the mechanism. You get the same productivity, happier workers, and you pay them less.

Anna Stansbury:

Right. So, then the question is, "Are you extracting rent or are you creating value?" If the workers are better off and the firm is better off, in some sense, it's a value creating transaction, but maybe the firm is-

Scott Cunningham:

That's true.

Anna Stansbury:

... the biggest share of the value than the worker. If the worker is left the same and you cut their pay by exactly the increase in the welfare from the remote work, then I think the rents will go to the firm.

Scott Cunningham:

Oh, that's interesting. Right. Right.

Anna Stansbury:

And then the question is, "Do they get passed onto a consumer or do they sit in the firm?" That's where the product market competition becomes important. So, I think it'll be really interesting to see how it plays out, because also, different companies are taking different stances right now about what they're doing with pay for remote work. So, some of them are saying they're adjusting pay to local cost of living and some of them are saying they're not. That's going to have to shake out at some point. I don't know how it's going to shake out.

Anna Stansbury:

But my sense is for the companies that are able to go fully remote, unless they're in very monopolistic product markets, a big share of that cost decrease must inevitably passed on at some point to consumers. We're going to see some really interesting dynamics into which industries can do fully remote and which can't and how that plays out, I think.

Scott Cunningham:

Yeah. Yeah. Yeah. I bet you'd get a bunch of some cost fallacy stuff at the firm though like Apple. They're like, "Man, we just built this giant city headquarters. You all better come in. I can't rent this out to the local church or something."

Anna Stansbury:

No, it's true actually. Once you've got that infrastructure, physical infrastructure in a place, it's very, very hard to go back from that.

Scott Cunningham:

Yeah. Well, it is so nice to meet in person and to talk more with you about your interesting work. Thank you for being on the episode.

Anna Stansbury:

Oh, it was so nice to talk. I really appreciate it. Thank you for inviting me.

Scott Cunningham:

Yeah. Okay.