With 2020 in the rear-view mirror, Alfred University president Mark Zupan and Jed Kolko, Indeed.com’s chief economist, will explore COVID-19’s impact on the global, national and regional economies in a Rochester Beacon online forum on Jan. 14.
Both Rochester natives earned economics Ph.Ds in Cambridge, Mass., Kolko at Harvard and Zupan at MIT. Zupan’s childhood in Rochester was brief; the family moved to Columbus, Ohio, after 4-year-old Mark’s mother completed her Ph.D. at the University of Rochester. Kolko grew up in Brighton, graduating from Brighton High School.
Zupan returned to New York as dean of UR’s Simon Business School after leading the Eller School of Business at the University of Arizona and serving on the faculty and administration at the University of Southern California. In 2016, he became president of Alfred University in Allegany County.
Since leaving Harvard in 2000, Kolko has made his career in the Bay Area. His interest in applied research included stints at Forrester Research, the Public Policy Institute of California, and Trulia. His 2016 job change placed him in charge of a staff of 16 at Indeed.com, the world’s largest job site.
I spoke with Kolko and Zupan this week in advance of the Beacon’s upcoming Zoom event, “The 2021 Economic Outlook: COVID and Beyond”:
ROCHESTER BEACON: What do economists actually do? Tell us how you’ve applied economic tools to practical questions.
KOLKO: I use economic data from sites like Trulia or Zillow to explore housing markets and data from Indeed to understand job markets. Housing and labor markets are incredibly important to personal decisions—where to live, where to work, what career path to follow. My work is closer to the “sociology” edge of economics than to the “physics” edge.
The tools of economics can also be used to evaluate public policy. When at the Public Policy Institute of California, we assessed California’s Enterprise Zone program, the state’s main tool to attract new business to disadvantaged parts of the state. Program proponents would say that the program had big effects on business location decisions and getting local residents employed. But using the tools of economic research, we concluded that the program had no effect on employment. Program assessments are often based on testimonials or anecdotes that are either incomplete or intentionally biased. Empirical research can reveal more clearly what effect a policy does or doesn’t have.
ROCHESTER BEACON: Mark?
ZUPAN: I work more at the intersection of economics and political science. I majored in college in political science and had aspirations to become a lawyer. I’m glad I didn’t follow that path!
As an example, there’s an economic model that claims that money makes the political world go around. But my collaborator and I have found that ideologies matter more, although they are squishier to measure. We found that someone’s conception of how to make the world a better place had more influence on their actions than money, even where pocketbook issues would seemingly matter more.
We applied this to laws covering strip mining for coal. In that study, we thought that we were going to validate the idea that the policy was driven by money–but ended up 180 degrees opposite. We found that we could predict how senators would vote on strip mining legislation by looking at their votes on abortion. Their ideology was the deciding factor.
And we’ve looked at cable TV regulation, to see whether government intervention actually serves the public interest to keep prices down. Instead, we found that it often simply promotes politically valuable investments that are pretty useless to the average consumer.
In a book I wrote before joining Alfred (“Inside Job: How Government Insiders Subvert the Public Interest”), I looked at the “supply side” of politics. To what extent does government actually operate on behalf of its citizens? We focus a lot on how government can be corrupted by pressure from outside interest groups—this is the “demand side” of politics.
But to what extent does the system get co-opted and corrupted by the “supply side”—where government insiders take advantage of the system for their own benefit? We see many examples of this in autocracies. But as the phone call over the weekend from Washington to the secretary of state of Georgia demonstrates, democracies also have to protect themselves from being corrupted from the inside. Insiders have the motive and the means to run a system into the ground.
ROCHESTER BEACON: How does that analysis affect the role of college president?
ZUPAN: There was a case at Adelphi University about 25 years ago where the college president was in cahoots with the board and would take off on junkets to places like Italy. He was pulling down a great salary and the board got some wonderful travel. So, we’re not immune to this sort of thing in colleges and universities. Governance matters in all organizations and we have to ensure that the public interest is served.
ROCHESTER BEACON: And how did you get involved in administration?
ZUPAN: Early in my career. I was part of a group young faculty at the University of Southern California. USC, then better known for football, was trying to establish a reputation as a strong academic institution. Our group raised a lot of questions, “Why are we doing this? Or why are we doing that?” But we worked for a dean who had learned that the way to cure you of that affliction was to put you in charge of something!
I learned that it wasn’t as easy to solve a problem as it was to talk about it. And I loved the work—balancing the trade-offs, getting different people to work together, figuring out how to solve problems. Even though the job of a faculty member is one of the best jobs there is, I love what I do.
ROCHESTER BEACON: Jed, what drives decision making at tech firms? Is it just about making money?
KOLKO: I think that many tech firms aspire to be somewhat mission driven. Our mission at Indeed is to help people get jobs.
But we also perform research just as a public service. We have data at Indeed that complements the kind of data that the government gathers and publishes. And we make that data available to help employers and job seekers be better informed about their opportunities. We publish indices of daily job postings by metropolitan area, for example. They don’t replace the traditional employment data published by government but add to our understanding of real-time changes in the economy.
Other tech companies focus on the housing market or financial markets. These firms generate data that can inform us about other important aspects of the economy. Researchers, policy makers and journalists are beginning to appreciate alternative forms of data. As funding for traditional forms of government data is flat or shrinking, there is growing demand for research like what we do, what LinkedIn does, etc. That reflects a certain public service mindset that benefits everyone.
ROCHESTER BEACON: How much freedom do you have to explore Indeed data to explore questions that intrigue you? And do you collaborate with academics and other researchers?
KOLKO: We have a lot of freedom but are clear-eyed about which questions we can and cannot answer with our data. Some of the data are competitively sensitive, too, so we can’t share everything. We do work with academics and with government researchers. Making our data public through the FRED database is part of that commitment.
ROCHESTER BEACON: Thanks, Mark and Jed, for your time. I look forward to our discussion next week.
Questions on tap for Jan. 14 include:
■ What are the near-term prospects for the Rochester and Finger Lakes economies?
■ How has COVID-19 accelerated existing patterns of engagement in the workplace, in education and other settings, patterns that will persist?
■ Will business travel ever go back to the pre-COVID “normal” or will video calls become part of a new normal?
■ Might some COVID-safe activities (like home improvement) have pulled forward work that might otherwise have been spread over 2021 and 2022? Should home improvement stores expect a post-COVID slump?
■ Will movement away from expensive, high-density cities like New York persist, opening opportunities for second-tier cities like Rochester, Buffalo and Syracuse?
There’s more to discuss than we can possibly fit into an hour! The event is free to attend, but registration in required. Sign up here.
We promise to leave some time for your questions, however. Send them in advance via email to [email protected].
Kent Gardner is Rochester Beacon opinion editor.