In his first visit to CASBS since his 1996-97 fellowship, UC Berkeley economist David Card lifts the veil behind the innovative empirical work on the labor market effects of immigration, minimum wages, and education that earned him the Nobel Prize in 2021. In conversation with 2024-25 CASBS fellow Dylan Connor, Card also explores issues and questions involving the relationships among geography, social and labor mobility, and wealth inequalities.
In his first visit since to CASBS since his 1996-97 fellowship, UC Berkeley economist David Card lifts the veil behind the innovative empirical work on the labor market effects of immigration, minimum wages, and education that earned him the Nobel Prize in 2021. In conversation with 2024-25 CASBS fellow Dylan Connor, Card also explores issues and questions involving the relationships among geography, social and labor mobility, and wealth inequalities.
DAVID CARD: UC Berkeley page | Berkeley economics page | Wikipedia page | Nobel Prize page | Google Scholar page | Berkeley Nobel Prize article |
DYLAN CONNOR: ASU page | Google Scholar page |
Work emerging from David Card's CASBS year
Other CASBS fellows mentioned in this episode
Narrator: From the Center for Advanced Study in the Behavioral Sciences at Stanford University, this is Human Centered.
Do work that's valid, no matter what you find. So says David Card, who explains to us that in some of his most consequential work, nothing much really happens, but much of this same work earned him the 2021 Nobel Prize in Economics. How is this possible?
We'll find out in today's episode of Human Centered with David Card, the Class of 1950 Professor of Economics at UC Berkeley, in his first return to CASBS since his 1996 to 97 fellowship year. Card is renowned for his empirical contributions to labor economics, including how people earn their incomes, as well as labor market effects of immigration, minimum wages, and education on different groups of people in the real economy. He has pioneered research designs and natural experiments that leverage chance events, rapid policy changes, the availability of new data sets, and unusual historical conditions to disentangle correlations from causality and identify definitive causal relationships that help overturn decades of orthodox economic thinking.
Walking us through the innovative advances in some of the major collaborations and case studies behind David Card's Nobel Prize-winning work is Dylan Connor, a 2024-25 CASBS fellow and assistant professor in Arizona State University's School of Geographical Sciences and Urban Planning. Dylan's current research focuses on the role of places in influencing people's life trajectories, with resulting implications for social and income mobility as well as wealth inequality, and builds upon much of Card's body of work. You'll hear Dylan engage David on some of these extensions, including why some urban centers have diverged in terms of economic opportunities, and whether certain community structures or contexts better facilitate labor and income mobility, including the community in Canada where David himself grew up.
The two dive into big picture questions and issues relating to the social science enterprise and the intersection of social sciences and policymaking. In a noteworthy exchange, David reveals why academic researchers motivated by producing policy-relevant work or influencing policy is quote, the worst idea that will leave them in a very bad way. Listen for his explanation and see what you think.
Dylan Connor: David, it's brilliant to talk to you today. My own CASBS project is focused on trying to understand the role of communities and regions on life chances and how that's changed over the past century. And so I think your work has really set the stage for a lot of that work. And when I think about you, I think of a person that really standing on the shoulders of giants in terms of how I do my work as a kind of an outcome of the work you've been doing.
We also have a great geographic connection, which is at CASBS for those who don't know, how every study has a list of names on the wall, which is the kind of ghosts of the study. I chose study 51 this year, which is a kind of a mythic study at CASBS. It's been home to Milton Friedman, Emanuel Wallerstein, Robert Putnam, Alejandro Portez, Robert Sampson twice, and David Card in your CASBS fellowship year in 96-97. So welcome back to CASBS, David.
David Card: Oh, thanks.
Dylan Connor: So for our listeners who might not be familiar with your work, can you tell us a little bit about what you do as an economist?
David Card: Well, I'm what's called a labor economist and I work on topics around people, I guess you would say. So topics like education related topics, some health related topics, as well as topics about how people earn their incomes and how different factors in the economy affect outcomes for different kinds of people.
Dylan Connor: And so in 2021, you won the Nobel Prize in Economics. Which part of that research was that prize awarded for?
David Card: Well, they said for my empirical studies in labor economics, I think probably what they were, what they cited mostly in the citation was my work from the late 80s and early 90s. At that time, labor economists had been for some time and trying to develop and push the idea that social scientists could possibly separate correlation from causality. Through use of things like natural experiments or careful research designs which tried to build credible basis for making a causal statement rather than just a correlational statement.
So some of the early work that I did with my students and with others at Princeton where I was a faculty member at that time sort of sets some of the stage for that. So they cited work I'd done on immigration studying the effects of the Mariel Boat Lift.
They cited some work I had done looking at the effects of minimum wages, particularly a study that's fairly well-known, looking at the impact of a rise in the minimum wage in New Jersey. In the early 1990s, using as a kind of a comparison group. This was focused on fast food restaurants, so focusing on fast food restaurants in New Jersey versus Pennsylvania, where there was no increase in the minimum wage. All extremely straightforward kind of things.
At the time, it's kind of surprising that other social scientists and economists hadn't really focused so much on this. And actually, very late to the game was statisticians. They kind of had this hard line that their only possible causal statements could be coming from randomized controlled trials. I think now most stats departments have a causal inference class, and it's kind of using some of these ideas. So yeah, that's probably why I won the Nobel Prize.
Dylan Connor: And so just for the listeners, can you say a little bit about what a natural experiment actually is? And why is it such a powerful research approach?
David Card: Well, I guess an example of that would be the Mariel Boatlift. So if you're interested in the ways that immigration affects the economy, one of the leading questions that almost always comes up is, is it true or not that as you add more immigrants to an economy or to a local economy, that labor market conditions get worse for the natives? Actually, every day, there's some claim about that.
It's very hard to do a convincing study of that because normally, what happens is immigrants are pretty strategic in where they go, and they're not going to go to a really lousy labor market, they're going to go to places where there's jobs. So that makes it a little bit difficult to say, well, the immigrants are going where they're good jobs. If there were no immigrants, would there be even more good jobs for natives?
That's kind of the question that people would raise. So in 1980, there was an event in Miami, or excuse me, in Havana, at one of the embassies. A bunch of people had kind of lined up to do paperwork to exit Cuba.
At that time, it was hard to leave Cuba, it still is, I guess. And the number of people accumulating in this embassy grounds kind of grew and grew and grew. And so Castro got the idea of trying to resolve it.
And what he said sort of out loud was, well, Cuba's a free country, anybody that wants to leave, just go down to the port of Mariel, which is basically the seaport beside Havana, and you're free to go. Now I think what he wasn't fully thinking about when he said that was, Havana's not that far from Miami, and over in Miami, there's a huge ex-PAC community of Cubans with boats. Many of them have boats.
So in the course of about three months, 150,000 people moved from Havana over to Miami. And a little over half of them stayed. So this was a very large increase in the number of Cubans, or working, available to work in Miami.
And it's, you know, people would call that an actual experiment for the study of immigration because the reason why these immigrants came to Miami wasn't really anything about the good conditions in Miami. In fact, you know, Miami was not doing particularly well at that time as a labor market. But rather a combination of Castro's kind of crazy idea and the fact that there was this huge expat community and the fact that it's not very far
So it all kind of fell together.
Dylan Connor: And so one thing that I really wanted to ask you is, it seems that identifying these natural experiments takes a bit of kind of clever reading of the history or, you know, taking advantage of unusual historical conditions. Where did you get that idea from? I mean, why were you the person to spot that?
David Card: Well, in my particular case, it was because I was at Princeton on the faculty, and Princeton has a kind of an unusual thing that all of the third-year students, which are called, in the United States, are called juniors. They all write two independent research papers, and then everybody has to write a thesis. And so for my, I was there almost 20 years, and for my career, I supervised dozens and dozens of junior papers and senior theses.
And one of the students I was assigned to supervise was a guy named Constantine Alexandrakis. And he was from Miami. And he came into my office and started talking about this Mariel Boatlift thing.
Now, indirectly, it was somewhat well known because there's a very famous movie called Scarface, which almost every American has seen. And Scarface is a Marielito. He's somebody who came with the Mariel Boatlift.
And the opening scenes of Scarface are actual real footage of the Mariel Boatlift. And the story underlying it is somewhat true in that while the Boatlift was going on, Castro got the idea of throwing into the mix of people leaving, people that he let go from prison and some of the facilities for incompetent people and others who were imprisoned. And so actually Scarface was allegedly one of those.
So people kind of knew about it. But I don't think the idea that an economist would study that and write a real paper about that in 1990, that was like completely off the rails. Like for some reason economists thought that wasn't serious or wasn't suitable thing for economists to study.
And now, of course, people do that all the time. The reality is there's always things like this going on. Some of them are in the historical record.
Some of them are happening in real time right in front of your face. And, you know, you often have to wait then till some data starts accumulating. For instance, lots of times, for instance, in 2016, the country of Germany didn't ever had a national minimum wage.
There was actually quite a few European countries don't have minimum wages. And it was sort of an issue that was raised. And there was this conservative chancellor, Angela Merkel.
And no one would have ever thought that Angela Merkel would introduce a national minimum wage. But she was very conscious of the problems for low wage workers. And, you know, some of her constituents were kind of concerned about that.
And so eventually, against the advice of her economic council, one of whom was one of my former PhD students. So against the advice of, and many German economists are quite conservative. So against the advice of all these dudes, she introduced a minimum wage.
And so that's kind of an actual experiment because there wasn't, it was like very unexpected and it happened overnight and it was set at a fairly high rate. And it was great for studying. There's many good papers written about it.
So these kind of things are happening all the time, actually.
Dylan Connor: And so one piece of, so these natural experiments weren't commonly used when you were starting to do this research. Was there any particular reason for that? Was there any, you know, technological innovation that made them possible? Or was it just something that was under the radar for economists at the time?
David Card: Well, you have to, I think you have to understand economics for many, many years, say from 1900 to 1975 or 1980, was struggling to become more mathematically oriented and more theoretically structured. And during the time that I was a graduate student, and all of the best economists were really theoretically focused. And that, it was thought that, you know, if we could just get a good theoretical model of the economy, we could fix all our problems.
Now, by the 70s, that was kind of obvious that that was not true, probably, and probably more thoughtful people never thought it was true. But anyway, that was sort of the vibe. And certainly, until, you know, relatively recently, 15 or 20 years ago, all of the important economists were theoretically oriented people, all the ones that you've ever heard of.
And applied work was sort of something that you would do after you had developed a theoretical model to say, well, the theoretical model says that there's these parts of the model, they're like constants in a physics system, you know, like the speed of light or something like that. And so we need to get those. And so we get this kind of second level of economists to estimate those.
And then they take them and they bring them to the much smarter group who use them in their modeling. By the time I was involved in economics, labor economics was a little different. And especially at Princeton, there was more of a tradition of taking it as a serious subject, which had an empirical basis.
And I was always very interested in thinking about economics more as a real science, where there was important things that we possibly were saying were true in models, but weren't true, that kind of thing.
Dylan Connor: Yeah. Well. And so thinking about your explanation of how you came across those natural experiments, do you see any kind of general structure to, you know, how you identify a good natural experiment? Or maybe another way of asking the question is, where do you get good ideas from? And is there, do you have a model for that?
David Card: Well, I think, I'll give an example of something that happened. I've been working for a number of years, maybe almost 10 years now. The 1940 census was the first time that they had asked everybody in the population of the United States, a lot of questions like education, income, occupation.
And that data is now available for 100% of the population. And it's extremely powerful to have that information if you're trying to study black versus white differences or something. And you can link it forward to administrative records on how much people earned in the 70s and 80s and 90s and how long they lived and all that kind of stuff.
And so I've been interested in that. So in the course of doing that work, my general rule is to try and read everything that was written about a topic that you're working on from the time it was done. My wife is an historian and that's the way historians think.
Like who cares what somebody says about it today? I want to go and see what people thought at that time. And so I was reading up about this and I found out something extremely interesting.
So in 1940 they started to realize there was probably going to be a war. Americans weren't in it yet but they were thinking about it. So they started testing men in the country for eligibility for the draft.
And they had two parts of the test. One part was IQ test kind of thing and one part was a health test. It turns out they found that amongst 20 to 40 year old black men in the United States, 25% had syphilis.
Okay now penicillin is discovered in 1940, roughly 1940, and within five years penicillin or syphilis is more or less eradicated. So you get this amazing change. All of a sudden you go from 25% of people have syphilis, and that means their wives have syphilis, their children probably get syphilis, and syphilis is this congenital disease that builds up over time, and if you have it for more than 10 or 15 years, you start to get really long-term health problems.
So you also get rid of that. So I realized like no one has really said, was that an important part of progress for African Americans relative to whites? It's just getting rid of this burden of disease.
So just by reading these things, and I think there's millions of things like that, it's that people are totally not being very creative when they read things and think, well, what could we do with that?
Dylan Connor: So you're almost saying that it's almost paying attention to the real world and to history and being an observant.
David Card: Yeah, I'm just keeping your eyes open and trying to absorb things that people used to know. There's an amazing number of arguments that go on in the world today, which if you think about it carefully and say, well, we're arguing about something that everybody used to know. Like I always tell people, when there's, I've had a large number of PhD students, like well over 100.
When they're thinking of a topic, thinking about what they would want to work on, I always say, go back about 30 or 40 years, and you'll see that there were topics that were incredibly engaging back then, and that people were totally working on, and then they've disappeared. They kind of ran their course, and a lot of times, the literature at that time got to a certain stage, and then kind of ran out of steam, there was no data available, or the modeling wasn't very good or something. So those are almost always great questions, because really smart people were engaged with them for 10 years, and they all walked away, and everyone's forgotten about it. Okay, grab one of those questions. That's my idea.
Dylan Connor: So just stepping back even further a little bit, could you tell me a little bit about you as the person? Where did David Card come from, and do you feel in any way if your childhood or early life had any influence on the trajectory of what happened in your research?
David Card; That’s a little hard to say. I grew up in a rural community in central Ontario, about 50, 60 miles from Toronto. My father was a dairy farmer. That part of Ontario was settled right after the Napoleonic Wars. And so the farm that I grew up on, which my family still owns, was purchased by one of my ancestors, a Card in 1820.
And it was still a rural area when I grew up. So I actually went to a one-room school for three years of my life. But then I had the advantage that there was a nearby city, a city called Guelph, and it has a university. And it had pretty good high schools at the time. And at the time of the baby boom, they needed so many teachers. I was at the very peak of the baby boom. They needed so many teachers. All the high school teachers were relatively young and well-trained. And that was a huge advantage. So I had really good math teachers and so on.
And I think growing up on a farm, I realized, you know, dairy farming is extremely hard work and also absolutely relentless. Like every day, you have to milk cows twice a day, no matter what. And I decided that that was not the easiest life. Now virtually any other job you ever have after that is much better than being a dairy farmer. Because pay is higher and the working conditions are better. So that's good training probably.
I went to college. I wasn't sure what I wanted to do. I was in the science track. I kind of inadvertently became interested in economics. And I had the luck to have some people who kind of steered me to Princeton. I was kind of interested. I had jobs in working in steel factory and working in a warehouse and stuff like that to earn some money to go to college. And so I had kind of a blue collar job background and I got interested in labor economics.
Dylan Connor: My own dad was a painter and decorator of buildings. And I worked with him for a few years and he used to say, this is your education on why not to become a painter and decorator.
David Card: Yes.
Dylan Connor: So do you see any connection between dairy farming and economics? Or what do you talk to your dad about? Or did you talk to your dad about?
David Card: Well, my father was a very practical person. He was the person in the neighborhood. And he had a welding shop. And so all the neighbors would come with all their broken equipment and he would fix it. And my brothers and I are all a little bit more like that, like basically fairly practical. For academics, I'm extraordinarily practical. I mean, I have a 1956 Ford tractor and I fix it, and I have an old sports car that I keep going and things like that.
So I think there's a practical side that's helpful for empirical research. And the reason why is because if you're a theoretical person, you can go for perfection because theory is not a real thing. It's an abstract concept. So a good theory is like a really good Picasso painting. It's extremely stripped down. It's got stylized features that you can recognize. And it captures the essence of the problem. Empirical work is never like that. Empirical work is always a mess. And it's kind of like fixing an old tractor. It's never going to be perfect. You just have to get this stupid thing to run. So I think that's...
Dylan Connor: I love that.
David Card: So I think that's kind of the way it is.
Dylan Connor: So I think in, you know, beyonds Canada, and if you're thinking about the long track of your career, are there any kind of big highlights or, you know, big discoveries that, in your mind, really stand out to you, or even big lows?
David Card: So you're thinking like things that have happened in economics that...
Dylan Connor: No, like in your academic career. Are there moments where you think, that was the moment where things changed for me?
David Card: Not really, no. I mean, I've been extremely lucky in... Like I kind of mentioned, there was a couple of young professors at… I was an undergraduate at a university in Canada called Queen's, and there was a couple of young professors, again, because of the baby boom, they had built up the economics department there, and they had a lot of young people, you know, people with PhDs four or five years ago that were kind of at the forefront of research at the time, and three of them were from Princeton, and so they kind of guided me toward that area, and then two of them had the advisor who became my advisor, Orley Ashenfelter, who was... been at the Center for Advanced Study, I think maybe twice actually. So having Orley as an advisor, that was just amazing luck for me because, first of all, would get along really well, and secondly, he was at the forefront of the making labor economics a more empirical subject, integrating theoretical ideas and econometric ideas.
And that was very helpful. after I finished my... during my PhD, I met several people that I stay friends with, who are, you know, were great in helping me. We co-authored some papers. My first job was at the University of Chicago. I ran into a couple of doors down was a labor economist named John Abound. And we wrote a couple of papers that were really influential for my career, learning how to do things that I didn't learn in graduate school, that John already knew how to do. And so my career is really like that. It's been like running into new people and finding out things that I didn't know about.
So I would say the more important thing for me probably is the people that I ran into. Rather than, you know, ultimately that might have led to a paper, but it was probably the people that were the more important part.
Dylan Connor: And is there anything specific that you look for in collaborators? Or is there, you know, how do you decide which are the right people to work with?
David Card: Well, I've had quite a few, probably 40 or 50 co-authors. But it's very important for me that we kind of agree on what we're doing. And there's a phenomenon in economics, especially in applied economics, which is a little bit in the other social sciences, which there's one style of research question that people sometimes work on, where you would say, I have an idea, we'll go test it. If there's nothing there, then we shelve it. Okay. I hate those projects. I can't stand that kind of work. So to me, I won't-
Dylan Connor: Can you say why?
David Card: Well, I don't believe you should start a project unless the project is equally valid, whether you find nothing or you find something. And what's really wrong with lots of social sciences, and probably sciences for all I know, is this kind of bias toward, okay, I'll only tell you when I find something. So it's p-hacking or, you know, there's many versions of this, and people are constantly aware of this.
And so if I, once I know somebody well enough to know, like, are they somebody that doesn't want to do that kind of thing, wants to do the more, okay, let's, let's find a question where if we study this and get an answer, and we show that actually nothing happened, that would be great. Most of my papers are really like that. My, my work on the minimum wage is kind of, they raised the minimum wage, employment didn't change.
My paper on the Mariel Boatlift, all these Marielitos came in, employment opportunities for natives didn't change very much. So to me, that's like the most important thing is to be able to have work that is valid no matter what you find. And once you can agree on that, you can almost always agree on lots of other things.
Dylan Connor: And how do you think the academic journals are doing in terms of being open to work that isn't just catchy or statistically significant?
David Card: Pretty terrible.
Dylan Connor: You don't see much progress there.
David Card: I would, yeah, I don't know. I don't, I mean, some editors are very conscious of it and some people are conscious of it. But the economics has become a much larger field and much more competitive. These days, it's extraordinarily competitive field now. Much more competitive than it was when I was a younger person.
And so people are competing for a very small amount of journal space in the top journals. They're competing for grants. Now, who knows what they're competing for since the grants are disappearing. But they're competing for prestigious jobs. The best job at a good university is incredibly renumerative. So economists are very well paid relative to most other academics. And you can also get all these other opportunities, research grants and so on.
So people really struggle hard to get into economics. It's really hard as a PhD student, one of the hardest fields or the hardest field to get into. And then they struggle hard to get noticed and get accepted. And that leads to a little bit of this problem, I think.
Dylan Connor: Okay. I wanted to ask a little bit about your work on geography and economic opportunity. So can you give us a sense of some of the big trends for big cities over the last couple of decades? And in particular, why is it that big cities seem to have such high wages?
David Card: Yeah. Well, the advantage of being in a city versus being in the countryside, on average, wages have always, productivity has always been higher. And that goes back to medieval times, actually.
So, you know, there's economic historians studying the Italian Renaissance and stuff, and, you know, being in the city was an advantage even then. But in the last, since 1980 or so, one thing that's emerged is the remarkable divergence between economic opportunities in some places and other places. On average, larger cities are good, but not all large cities are great.
I mean, Detroit isn't so great. Philadelphia is kind of average. Everyone, I think, knows that San Francisco, San Jose, Boston, Washington are places where there's a very good job market, and well-educated people at the top of the labor market, they kind of could leverage their skill and do much, much better in those places.
At the same time, there's whole pockets of the United States and lots of other countries that are really in big trouble. So Appalachia, everyone's kind of familiar with these problems in where there was a coal mining town or a manufacturing town that sometime in the last 20 or 30 years, the major employer's gone away. And really nothing has happened there since.
So what's going on in those places is people are being born, they're getting educated, and then a high fraction, especially of the ones who want to go on to college, end up leaving, and you end up with places where there's some depopulation and almost no in-migration and very selective out-migration. So the best people are leaving in some sense. The best educated, the most entrepreneurial, the hardest working, and you're left with a group that have some skills and some talents, but there isn't anybody for them to work with, to build a new firm or start a new line of work or something.
And that's not just true in the United States. That's true, like parts of East Germany are like that. Parts of Australia are like that. Big parts of Great Britain are like that. Parts of France, Spain. So it's all over the world. This same phenomenon.
Dylan Connor: And do you have any thoughts about these kind of left behind places, what we can do about that problem?
David Card: Not really. I don't have any really good ideas. I mean, what seems to me to be true from work I've done and others have done is those places lack… Employers are not interested in going there. Most employers, especially employers that offer a diversity of jobs with opportunities for career development and... So those places then end up having, first of all, there's a big health care sector because there's kind of an old population that's not very healthy. So you can go into health care and that's probably the best job you can get. Or you can, you know, there's not much else. So there...
And if you talk to a large employer and say, well, okay, why won't you put a facility in one of these places? They say, well, you know, first of all, reality, their managers don't want to live there. So no one wants to live there. And secondly, they think there's going to be problems with the local labor force, you know, not finding the types of workers they want. So it's kind of a bad equilibrium.
Dylan Connor: And do you think there's any way to incentivize firms into those places?
David Card: Well, I think that's an interesting question. You know, there are attempts to do that. They're typically small. You know, like a lot of things in economics, they have relatively modest effects.
It's possible if we're going to be in the era of depopulation, which many countries are in, you don't really want to do that. You might want to say, okay, you know, this is true in Korea, Japan, Germany, Italy. There's a declining population. Do we really want to maintain a population in all these places, or do we want to let those, you know, some of them will come tourist areas or revert to a slightly, you know, off the grid set of people can stay there. But probably, you know, we want to concentrate our infrastructure a little bit.
Dylan Connor: And so thinking about the flip side, the big cities which, you know, have these really high wages and really expensive property, something you often hear people talk about when they're thinking about staying in a place like San Francisco or moving there is really this trade-off between the price of the housing and the rent versus the income. And so I guess one question there is, to what extent are people really better off in these big places? And what does the evidence say about that?
David Card: Yeah. Well, the evidence is kind of grim. So if you go from, I have a relatively recent paper on this topic.
And if you go from like a slightly below average city like Cincinnati to San Jose, you might expect, this is studies of actual people who make these transitions or make a chain of transitions that amount to the same thing. You might expect to see a wage increase of around 30 percent.
Now if you look at housing price difference, it might be like over 100 percent. So it's probably three and a half times bigger. And if you think about it, a typical American family spends a little over a third of their income on housing. So if your income is $100 better, you can just barely afford it. Because if you spend a third, you can kind of pay for it.
And probably in terms of, are you better off or not? For the people who are kind of moving, the view of economists might be, well, probably they're close to indifferent. Otherwise, more of them would have moved. So that's a powerful idea in economics that when you're thinking on the marginal who's moving back and forth, probably they're not that much better off in San Jose than they are in Cincinnati. Otherwise, everybody would leave San Jose. Who could? Who could get a job there?
So there's some better features that certain people enjoy, like maybe cultural things are higher in some places, or access to the beach if you're a surfer or something like that. On the other hand, offsetting that, lots of people like to be near where their parents grew up or where their family are. In fact, the typical person lives within 100 miles of where they grew up.
So, that's an offsetting factor.
Dylan Connor: Right. But it is the case that the, let's say the really high earners are probably much better off in these big cities.
David Card: Right. Yeah, if you look at the concentration of corporate headquarters, I wrote a paper on that many years ago, it's amazingly concentrated. So, there's only a few cities where the headquarters of large, the 500 largest companies in the country are located. And there's one or two that are located in very obscure places for very obscure reasons, but the vast majority are like in New York, San Francisco, Boston, stuff like that.
Dylan Connor: I'd love to get your take on this paradox in the field at the moment around big cities and social mobility. So, one of the interesting facts is that if you look at the relationship between city size and average incomes, you see big cities, of course, have much higher levels of income. But when you look at rates of upward mobility for children from lower income backgrounds, actually on average, bigger cities actually don't perform particularly well, and in many cases are below the average. So, do you have an intuition for what might be going on there?
David Card: So, New York is not so great or San Francisco?
Dylan Connor: LA is not great, Atlanta, cities like that. Smaller communities, a lot of which are in the Midwest.
David Card: Doesn’t Salt Lake City always stand out?
Dylan Connor: Salt Lake City stand out.
David Card: Maybe if we had more Mormons in the other cities? Is that what this is telling us?
Dylan Connor: I'm not sure. Is that your intuition?
*David Card: That would be the Putnam idea, right?
Dylan Connor: Right.
David Card: That they've got this incredibly... I go fishing with a good friend of mine, a Mormon guy, a PhD student, a colleague of mine. Yeah. I've been thinking about that for a long time. They basically have this old-fashioned community structure, kind of what I grew up with in my rural area, where there's like, you know, something bad happens, a neighbor shows up and bail your hay. So they have that a little bit more. They also have this... There's a phenomenon that's really interesting. There's a well-known… What's the name of the sociologist? She was one of Alejandro Portes' students. She was at UCLA. She has a Chinese name.
Dylan Connor: Min Zhou?
*David Card:** Min Zhou, yeah. She has this great observation, like, she did this long ethnographic study of, like, high schools in the United States, or California, right? And, you know, you can see these… In every high school in California, there's, like, a big Hispanic population, and they're kind of disconnected. They're from... They don't seem to fully understand, like, do this, and you can go to community college for a couple years, and then you can go to UC, blah, blah, blah. And you know, like, kids are really disconnected from that path. In the same school, there'll be, like, five Vietnamese kids who've got it all figured out. So there's something going on, right?
And, like, the Vietnamese people came in 1980, around the same time as the Marielitos, extremely disadvantaged, right? And still, you know, not all successful, you know, lots of nail salons, lots of construction jobs and stuff, but the kids are way upward, really mobile.
Dylan Connor: So you're saying that there's some features of these ethnic communities, which may be advantageous in some way?
David Card:: There’s some that are really, you know, success-oriented and, like, really, like, if you're a smart Vietnamese kid in Merced, somebody's got your ass and is going to get you into Berkeley. And if you're the same kid and Hispanic, no one's paying any attention to you, even Mexican-American, or not no one, but, you know, it's just not the same.
Dylan Connor: And so you think it's not really about the place, it's about the populations who are in those places.
David Card: I don't think places matter at all. I think places are nothing. I think it's just the context of the people who live there. How can it be? Places are nothing.
Dylan Connor: Well, the context...
David Card: Los Angeles is just a giant flat plain. It can't be anything.
Dylan Connor: What about the case that high density is good for industries, but not necessarily good for raising kids? And what's interesting is that wealthy people in dense places buy kind of rural amenities, low density neighborhoods.
David Card: Yeah, and they work really hard to keep everybody else out, like Atherton. When I was in college, I took an economic geography class and the poster child for that exclusionary zoning stuff was Atherton. Of course, I grew up in Ontario. I had no idea what Atherton was. I didn't know what exclusionary zoning was. We didn't have that in Canada.
Dylan Connor: And so thinking about your background, there is this feature that places like, I think, the place that you grew up in, tend to be quite conducive to upward educational mobility and income mobility. What do you think that's about?
David Card: I’m not sure. I mean, there was a very good school system at that time. It was very stratified. We're tracking like crazy in Canada compared to the United States. And Americans are just appalled by tracking. But most other countries have tracking, and most other countries are more upwardly mobile than the United States, like Norway and Denmark and Sweden have amazing tracking systems, right?
So what they're doing is they're sort of saying, okay, if you're from this poor family, but you're like academically oriented, we can do something with you and we'll put you. So that's probably what happened to me. I mean, I was in with these kids.
My friends from the rural area, they all stayed and became farmers or truck drivers or construction workers, or some of them became fairly skilled and successful. But then in high school, I was in this other track, and all those guys went to university and some, you know, a few of them became professors and stuff. And I think that was helpful in just showing that pathway.
I don't exactly know. I mean, my father's brother was a professor, so it's not like everybody in my family was completely illiterate or anything.
Dylan Connor: Is there a piece of work that you're most proud of? You have a favorite paper of your own? It doesn't have to be your most famous.
David Card: I wrote a paper on strikes in the 1880s in the United States. And I had worked on strikes before, and I believe that that was quite a good contribution, actually. And it's a very obscure topic. But I think I worked on it with someone who's passed away, but his name was Craig Olson, a very sweet guy, and he was an industrial relations specialist. And we were very excited about it, and I enjoyed working on it and learned a lot about... That was the era of the Knights of Labor and all kinds of things. And I learned a lot about that era. And so that's probably one of my favorites.
Dylan Connor: What are you most excited about right now?
David Card: I mean, there's amazing opportunities now for things that we can... There's thousands of questions that economists have had or, you know, social scientists have had, and we can start to answer them now. For instance, I'm working on a project where we got the administrative data sets from Germany and Austria. And now we can see... In those countries, it's kind of amazing. There's people who grew up in Germany and moved to Austria, and there's people who grew up in Austria and moved to Germany. And we can see what they were doing before they moved from one country to the other. And like, is it true that everybody who, you know, it's better to go one way or can people gain going in both directions? And so, and then, you know, a huge chunk of people who do that actually move back. So we can see like, is there a benefit to, you know, five years in Germany if you're an Austrian?
So to me, this is like really fascinating questions. And if you're a really, you know, grew up in the border region between Germany and Austria, everybody knows a lot of stuff about this[…]
It just took us a long time to find the data to be able to-
Dylan Connor: How is it possible to study that?
David Card: Because these, the two, we managed to convince some of my co-authors, really, managed to convince the two administrative agencies in these two countries to sign illegal agreements to share their data.
Dylan Connor: That sounds like a great project.
David Card: It’s very interesting. Yeah. So that's an example of something we can do that you just can't imagine. I mean, in principle, we could do that with US and Canada. That will never happen.
Dylan Connor: No, not in the near future.
David Card: No.
Dylan Connor: In 96, 97, you were here at CASBS. Is there any particularly fond memory of that year that stands out? Anything you particularly enjoyed about being here? Anyone you remember?
David Card: Oh, yeah. Sure. There was a sociologist named Roberto Fernandez. He's at MIT now. He was next door neighbor to me and Roberto was working on a quantitative project. We used to spend many hours discussing how, I would sort of say, how an economist would approach this and then he would think about that and say, what about this? Trying to kind of integrate some of the sociological insights he had with some of the ways an economist would analyze the data. So that was quite engaging.
It was the year that my wife and I decided to move to California, so it was quite important that way.
Dylan Connor: Yeah. Strong personal reasons as well. Yeah. I think from my fellowship year, I think that I'm neighbors to two political scientists who I wouldn't engage with normally, and it's kind of great to get a vision into those disciplines and get a sense of what's going on.
Dylan Connor: So I wanted to take a step back from economics a little bit and ask you a bit about your vision of the social sciences and of social scientists. So, you know, do you have a sense of where the big research opportunities or trends might be in the social sciences? And kind of coupled with that, what should we be working to try to do as social scientists? How should we be training ourselves? What should we be working on? What would move the project forward?
David Card: Yeah. I think those are good questions. You know, I've spent all of my life as an economist. I have a few friends who are sociologists, quantitative sociologists, but I don't really know enough about most of those other fields to say confidently what I think they should do. Well, you know, and also to tell you the truth, in my experience, there's a lot of people who have ideas about what other people should do. And I usually as, you know, I don't always find that that useful.
So I don't quite know what to think about that. I mean, in economics and the parts of the other social sciences are like economics, trying to study, you know, education, health, things like that. I think the quantitative side is pretty important. We now have access to amazing amounts of data. And so there's a need for that. There, it's possible that we've gone a little too far in that dimension.
Maybe we do need a little bit more big thinking. Partially because now with all the tools that are available, a relatively small number of people working in a big lab with lots of undergraduate assistants can accomplish an amazing amount of research. So it's possible that the whole research enterprise is going to gradually shift in social sciences to be more like a natural science model. Where you have at the top of some lab, you have some very well-known accomplished scholar and then under that person would be a bunch of assistant professors or post-docs and then under them would be PhD students and under them would be what we call pre-docs in economics, people who are finished a bachelor's degree and then under them would be a bachelor's degree and you can already see signs of that in some of the rich Eastern schools where there's a lot of resources per professor. It's a little harder to do like at a place like Berkeley because we don't have the resources to leverage one person and have 40 or 50 people working under them, but you can see that on this campus.
Dylan Connor: Right. And your sense is that that trend is going to continue?
David Card: Yeah.
Dylan Connor: For sure. What about the intersection of social science and policy? So you've worked on a lot of policy relevant topics, minimum wage, immigration. What are the trade-offs for social scientists becoming more involved in those conversations?
David Card: Well, people often ask me about that because I've worked on these topics. They kind of assume that I know something about the policy side. But I don't actually know very much. I had many friends and co-authors and so on who have gone into that to some extent. But I myself never was directly involved in policy. I've gone to a meeting or something once in a while.
I always tell PhD students that the worst idea for motivating yourself to become a research economist is that you want to influence policy. I personally think that's like a really bad idea. But that might just be my own strange views.
I mean, my own view is more like people are working for the knowledge and we're trying to build up a base of knowledge which may or may not be useful today. Maybe it'll be useful in the future. Maybe it'll turn out that what we think is useful now wasn't that useful.
I think that's happened many times. And so when you write a paper, you're really writing a paper for your friends, you know, your colleagues, your co-authors, your former advisors and stuff. And you're trying to advance that more than anything else.
And it's great if it's policy relevant. And they'll be more excited about if it's policy relevant and people might be more interested in it. But you can see right now in the United States, like there's an amazing number of policy decisions were made in the last week, which I don't think there's any scientific input to any of that.
And that's not just true in the United States. That's true in lots of countries. And so if you think, well, the reason why I'm economist is because I want to influence policy, you're going to be in a very bad way. So you can't think that.
Dylan Connor: And do you think that that link should be strengthened? That, you know, science, the policy pathway in any way? Or do you think, do you think that we're specialists in science? And that's what we…
David Card: I think there's lots of people who move back and forth. And, well, for instance, I had a someone that was very important co-author of mine was an economist named Alan Krueger. I believe Alan was here one time.
And Alan was, I met him, he came to Princeton as an assistant professor. He was just a few years younger than me. We wrote papers on many different things, including all that work I did on minimum wages. And Alan eventually got very interested in policy things. He was President Obama's head of the Economic Council. So he was heavily involved with that kind of stuff.
I think he was very talented at distilling down a few simple things in economics that you could possibly move the conversation a little bit. But also he was very realistic about it. He wasn't thinking that, you know, I'm going to develop this master model of the economy, and I'm going to get the President to adapt five things out of this.
I mean, most of what you're doing as an economist is trying to shut down are extremely bad ideas. And you can see since there's no economist in directly, you know, no reputable economist involved in the current administration, there's a lot of bad ideas.
Dylan Connor: And so let me ask you one more question about the social sciences and actually economics role in that. So I think one observation is that economists have started to engage more with outcomes that are traditionally outside of the field of economics, political polarization, social networks, left behind places. You think that's a good move for the discipline? Are there trade-offs to moving into those other areas and broadening the tent?
David Card: Well, I think that that move started a long time ago. Like, there's a famous economist from the University of Chicago named Gary Becker, who was in the 19... well, in the 1950s, wrote his dissertation on discrimination, black and white discrimination, at Princeton, and his undergrad, and then he did his PhD on the same topic.
And Gary told me, I mean, when he did that, people told him that wasn't economics. And then in the 60s, he started to work on, you know, marriage markets and how couples get together and how that sorts out. And he and some of his co-authors worked on like the trade-off between having more children and less children but investing more in the children. And everyone said that wasn't economics.
Dylan Connor: So this is a recurring theme.
David Card: Oh yeah. So, you know, another thing that's going on is, in all honesty, the perception that some economists have, and I certainly have this perception, is that other social sciences are more inward-oriented than they were. You know, if you go back to the 1940s or 50s and read what some of the most famous sociologists of that time were working on, it sounds just like economics, like Merton or Lagerfeld or something.
They're very engaged with social questions and people. And then to me, it seems like those fields have retreated a little bit and become more insular or focused on things and leaving a lot of opportunity for economists. And we can't resist, you know.
Dylan Connor: And that's a specialization trend?
David Card: I don't know, maybe, yeah. So the grand era, like the people who studied intergenerational mobility, the first people who studied that were all sociologists. And they were involved with collecting data.
The occupational change intergeneration data sets were collected by sociologists. Economists weren't even involved with that question until the 1990s, really. Yeah.
Dylan Connor: And that's an interesting case, because it seems that certain advances in data also open up new opportunities.
David Card: They do, but the question also just became something that we were interested in, like why is there such a strong persistence in occupational choice between parents and children? Sociologists have been interested in that forever. And economists suddenly say, we can study that. That's a great question. Why don't we study that?
Dylan Connor: Thanks for joining us today, David.
David Card: Okay, my pleasure.
Narrator: That was David Card in Conversation with Dylan Connor. As always, you can find us online or in your podcast app of choice. And if you're interested in learning more about the Center's people, projects, and rich history, you can visit our website at casbs.stanford.edu.
Until next time, from everyone at CASBS and the Human Centered team, thanks for listening.