Economics All Around Us: An Interview with Dr. Cezar Santos Part 1

Dr. Cezar Santos

By Maya Moritz

During this year’s Ringvorlesung series held by Mannheim’s Fachschaft VWL, students gathered in Zoom rooms for talks on the economics of love, sexuality, and dating.

Dr. Gigi Foster began the semester with an attempt to model love and relationships (part 1 and part 2 covered by bAStA). Later, Dr. Matthew Quaife presented work on PrEP and HIV prevention among sex workers.

Finally, we spoke to Dr. Cezar Santos about his 2016 paper “Technology and the Changing Family: A Unified Model of Marriage, Divorce, Educational Attainment and Married Female Labor-Force Participation” published in the American Economic Journal: Macroeconomics.

Dr. Santos is a Research Economist with the Bank of Portugal and an Associate Professor of Economics at the Brazilian School of Economics and Finance (FGV EPGE). Between 2012 and 2014, he worked as an assistant professor at the University of Mannheim.

His B.A. in Economics at the Federal University of Pernambuco was followed by a M.Sc. at the Getulio Vargas Foundation in Rio de Janeiro and a Ph.D. in Economics at the University of Pennsylvania (UPenn). Since then, he has published diverse, data-driven work on family planning, assortive mating, and marriage delays while dividing his time between Portugal and Brazil. He is currently writing a book chapter with University of Mannheim Economics Professor Michèle Tertilt.

In part 1 of his interview, he described finding his footing in economics, the process of “birthing” ideas, and why economics is an “awesome” field. Part 2 will focus on his research into female employment and labor-saving technology.

A New Perspective

Dr. Santos’s journey into economics began with a school exchange in Michigan, during which he scoured the news for stories of home. Along the way, he read stories concerning the economic crisis of the 90s, becoming fascinated by articles on Russia and the Asian Tigers, a term used for the four countries in Asia (Hong Kong, Taiwan, Singapore, and South Korea) which recovered fastest from the 1997 financial crisis.

His browsing gave him the perspective of being on “the outside looking in,” drawing him into the world of economics and propelling him to study it in his hometown college in Brazil.

From the start, Dr. Santos realized he was most interested in macroeconomics and thus targeted schools known for such scholarship in his PhD applications. After narrowing the search to the University of Minnesota, New York University, and UPenn, he chose the last.

While serving as a Research Assistant for UPenn Economics Professor Jeremy Greenwood, then-student Santos “started talking about all kinds of things” with his supervisor, leading to the 2016 paper Dr. Santos presented at the Ringvorlesung.

Though Dr. Santos has since published both model-based and empirical papers, he avoids favoring either practice. “I like putting the two together. I think there’s a very famous paper from a long time ago called ‘Theory Ahead of [Business Cycle] Measurement.’ It states that you can have data there but unless you have a systematic way of looking at that data, it’s not going to be as useful. You need theory ahead of measurement.”

He referred me to a Twitter meme he received from a friend, with letters spelling “I Love Macro” filled with smaller printings of the word “micro” repeated over and over. He explained, “Macroeconomics is whole bunch of micro people going around solving macro problems.”

„Economics is all around us. I had ideas talking to students and colleagues. I read a little bit of everything and connect the dots to get fresh ideas.”


Inspiration Everywhere

Talks with his superiors were not the only avenue for research brainstorming. “For a chapter of my thesis, another student had the idea of reading Time magazine.” The short blurb Dr. Santos stumbled upon described observations that “a lot more young people ten years ago are living with parents than a few decades prior. I thought, ‘that’s weird that people are living with their parents, why is that?’”

Dr. Santos reached out to Dr. David Weiss, a Senior Lecturer at Tel Aviv University, who analyzed the data and “found out that among single people, fewer are living with their parents. There are just more single people around because less are getting married.” This discovery inspired a 2016 paper in the International Economic Review entitled “Why Not Settle Down Already? A Quantitative Analysis of the Delay in Marriage.”

The paper discusses how “finding a job and settling down for that job is much harder nowadays than for young people in the 70s. People need to get themselves together in the labor market before going for big commitment like marriage and children,” according to Dr. Santos.

His work on the topic took inspiration from the contributions of legendary economist Gary Becker, who “started linking macroeconomic phenomena with family economics and vice versa.”

Sometimes, however, Dr. Santos is beaten to the punch. “I had an idea when 4 friends and I were driving to a hotel in the middle of the Amazon rainforest. We started talking about economics and one year later, I was reading something in the Economist about what my friend had told me.”

Still, Dr. Santos never has to look far for more ideas. “Economics is all around us. I had ideas talking to students and colleagues. I read a little bit of everything and connect the dots to get fresh ideas.”

The Natural Thing to Do

Dr. Santos has also published in the field of disease research. His 2019 paper in Econometrica, “An Equilibrium Model of the African HIV/AIDS Epidemic,” was started a decade ago. “The idea came from Michèle [Tertilt] because HIV is such a big deal for a lot of countries. It affects the entire economy, so macroeconomics is a good way to think about these things. Having used macro models to study infectious disease, when Covid-19 came along I had the ‘expertise’ or framework to think about these things for other infectious diseases, however different they are from the new thing (which turned out to be Covid-19).”

The project thus became the “natural thing to do” and tied in well to his work on financial development. “I like development issues. I am a macroeconomist who thinks about development a lot,” he says, pointing to several issues of interest across Sub-Saharan Africa.

“It doesn’t make sense to get an education if you’re going to die so soon, so we can relate HIV to human capital accumulation.” He also looked to study “contraception access to families in sub-Saharan Africa, in Kenya and Ghana. If you want to send two kids to college but can’t afford to and the family has four children, then we have a problem. Access to contraception affects output, the development side of things like family and education.”

His work extends to his home country, where he has published “a paper on financing about weird things in Latin-American credit markets that impact how firms grow, how they can hire workers, and how the more productive firms can grow. If you have a bright idea but no one can fund a start-up, then you lose that bright idea. So we need to study the credit market to see how we can fund the best and brightest in society.”

An International Effort

As a well-traveled researcher with positions across the Americas and Europe, Dr. Santos is uniquely qualified to compare the research environment internationally. “Each country has own peculiarities,” he says. “I had never worked with Brazilian data before leaving Mannheim and going to Brazil. Brazil has amazingly good data, very detailed data about how people in the slums of Brazil socially distance from others. A tech startup partnership gave us great data, anonymized for privacy of course, for different regions in Rio. We related it to a social demographic map from the public sector to study how the Covid-19 pandemic was affected by different people living in different neighborhoods in the same city.”

Other times, he’s been less fortunate. “In Brazil, financial development paper data from the Brazilian Central Bank can be extremely hard to get access to, even when my coauthor is from another bank.”

Still, he feels that his career has presented many opportunities. “I’m lucky or maybe I’m sorting to always work in places that give lots of freedom to pursue whatever research I wanted- Mannheim, Brazil, the Bank of Portugal. Pete Klenow, a Professor at Stanford, says that we’re living in the golden age of data. I do believe that’s true. There are some hurdles to clear to access data, but we have so much data out there to help answer so many questions.”

With “collaborators from all over,” Dr. Santos has “learned in the last 14 months that we can all work through Zoom and foster relationships from all over the world for international cooperation and to get the right people together.”

I’m lucky or maybe I’m sorting to always work in places that give lots of freedom to pursue whatever research I wanted- Mannheim, Brazil, the Bank of Portugal.


A Multi-Paper Policy

Despite a lengthy CV and considerable research experience, Dr. Santos remains cautious in his policy prescriptions. “I wouldn’t advocate a policy, almost surely not one based on a single paper, be it mine or someone else’s. What we really need to say ‘do x instead of y’ is a body of evidence. Macroeconomics affects so many people at once, I like the idea of ‘Oh, I found that in my paper.’ I want to bring the body of knowledge together inside one single paper so I can be so idiosyncratic about my response to one certain question.”

However, he feels more comfortable when discussing what Covid-19 has done to the research arena. “Methodologically a lot of policy prescriptions out there are based on a hunch, such as for Covid. As I said in my Mannheim talk, what economics is good for is to study behavior- have tradeoffs, make choices. We see that with Covid, like if you tell me that in Sweden people were freer than in other countries to go around and do things, then people just blindly go about their business. Alternatively, the government says I can [move freely] but it might be risky. Economics brings these ideas about changing behaviors, which is pretty cool.”

Much of economic work, he believes, is based on the views we take. “For the HIV paper, you can evaluate policy, in this case policy aimed at HIV as the same found in Covid. If you evaluate policy in a world where rational people make decisions vs. a world where people don’t make decisions, you arrive at different policy decisions. Your way of thinking about the world is cool and matters for the policy you end up with.”

Some of his paper conclusions have been unexpected. “When you get to look at it through a scientific perspective, answers might be weird. For my paper on contraception in sub-Saharan Africa, opening access is actually quite powerful. This includes access to the pill but also to abortion. I don’t think economics is the sole tool to go about tackling these controversial topics, but it actually turns out that we might want to think about them because they matter. You, of course, face a lot of pushback with other actors in society.”

Dr.’s Orders

When asked if he had any advice for aspiring economists, Dr. Santos said “Yes, but it’s hard to verbalize. First thing: if you like economics, you should totally do it! With economics, you can study so much stuff. I’m a macroeconomist that doesn’t really study ‘standard macroeconomic stuff.’ I even work at a central bank and don’t study financial policy.”

“If you’re interested in people making decisions in our society, economics is an awesome field to study,” he continued. “In order to do that, you need to have the tools, so tool up. You need to study a little bit of theory, empirics, micro/macro, need to be a broad person. It may require you to go for a master’s or a Ph.D., depending on what you want to do.”

Practically, economics has its pull factors as well. “Economics comes with an added bonus: great demand for economists and economic researchers. Even during the pandemic, economics Ph.D.’s are being hired all over the world. Compared to other disciplines, economists are relatively well-paid.”

The future of economics, according to Dr. Santos, looks bright. “Economics is an awesome tool to study our society and supply your labor. I’m sure demand will be there.”