Interview , News of 21 October 2016

SOEP People: Five Questions to Jennifer Hunt

Jennifer Hunt is a Professor of Economics at Rutgers University. Born in Australia and raised in Switzerland, she has held teaching and research posts in Germany, Italy, Spain, Canada, and the USA. She served in the Obama Administration as Chief Economist in the US Department of Labor from 2013-14 and as Deputy Assistant Secretary for Microeconomic Analysis in the US Department of the Treasury from 2014-2015. Jenny Hunt was one of the first US researchers to begin working with the SOEP data in 1989, and her publications played a significant role in making the SOEP known to the international research community. Her research focuses on themes of immigration and wage inequality, unemployment, the science and engineering workforce, the transition from communism, and crime and corruption.

1. Your career spans work as both a researcher and high-level policy advisor. What’s exciting to you about research?

You’re trying to find general rules for how things work: How is this system, which is the economy, working? And then I always have as a motivation that I want to help people [through] my research. That’s why I’ve been focused on the labor market. I’ve been interested in unemployment because the unemployed are so unhappy, and also in equality, in seeing how you can help people who may be working but are only earning poor wages. Then there’s the excitement: You get your data set and you can immediately start doing a few statistics, you can see what’s going on and ask new questions. And then you have the flexibility to investigate whatever you would like.    

2. How important is it to you that your research has a policy impact?

I was excited to work in the Obama administration for precisely that reason: I do policy-relevant research because I hope that it will influence policy. Of course, the best way to influence policy is to actually go to the government yourself. I was excited in particular because when I went to the Department of Labor, I knew the immigration reform discussions were just beginning, and I wanted to be involved in those. I had some ideas from my research, and other ideas came up there and in my work at the Department of Treasury as well. One resulted in a joint Treasury and White House report on occupational licensing. That was one particularly exciting topic.

3. One major area of your research has been unemployment. What motivated you to begin looking at unemployment, and what first led you to the SOEP data?

I started reading newspapers as a young person in the early/mid-1980s, when unemployment became a big topic in Europe where I was growing up. So I had this interest in unemployment that I began to pursue after finishing my undergraduate degree in engineering and changing to economics. My research since then has tried to get at the question: Why is unemployment higher than one would expect? Why does it go up so much in recessions? Perhaps because of my interest in unemployment, I became interested in the labor market more generally—in what people earn and why, including men versus women and the gender differences in the labor market.

I first found out about the SOEP data when I went to the Luxembourg Income Study workshop and met Professor Richard Hauser, who was developing the project at the time. That was 1989. My first paper with the SOEP data, written as part of my dissertation, “The Effect of Unemployment Compensation on Unemployment Duration in Germany,” was on disincentive effects of extending Arbeitslosengeld in West Germany and comparing the effects to the US. Surprisingly, I found the disincentives were similar in the two countries.

4. As a SOEP user for over 25 years, what do you find special about the SOEP data?

The SOEP data are just marvelous. They have been from the beginning, because the SOEP was able to learn from the PSID and improve a lot of things. Right from the beginning, it was a well-organized set of data with an excellent set of questions. What really makes it stand out, though, is how innovative the SOEP group has been. It was amazing how quickly they got into East Germany and got the first set of surveys before the monetary union, when things were essentially under the communist system, with retrospective information about communism. And more recently there have been all of these innovations like putting in psychological questions, having experiments, allowing people to design parts of the survey themselves in SOEP-IS. These things are very, very unusual. Now more countries have surveys like the SOEP, but I don’t think many of them are nearly this innovative in new questions and new methods.

5. What would you recommend to young people today who are just embarking on a career in economics?

I have a couple of recommendations. One recommendation that one of my professors gave me is: When thinking about what to do in your dissertation, do something you think is interesting. You need to be fascinated by the topic. On the other hand, if your advisor tells you there are 2,500 papers on the topic, and when you go on the job market nobody is going to be interested in the 2,501st, you should pay attention and maybe do something related but save up that topic for when you have tenure. Also, you should realize you need to be someone that sets your own deadlines – that other people won’t do that for you so you need to do that yourself. And you need to like research in general.

The SOEP People video of our interview with Jennifer Hunt can be found in the DIW Berlin Media Center.