In this episode, Shaoda Wang, assistant professor at the University of Chicago's Harris School of Public Policy, shares his career path in the field of applied economics. He discusses his initial love for physics and later finds the connection between physics and economics and an early mentor who made him certain he wanted to become an economist, with hopes of making this world a better place by researching and educating future policymakers about developmental and environmental economics with a regional focus on China.
In this episode, Shaoda Wang, assistant professor at the University of Chicago's Harris School of Public Policy, shares his career path in the field of applied economics. He discusses his initial love for physics and later finds the connection between physics and economics and an early mentor who made him certain he wanted to become an economist, with hopes of making this world a better place by researching and educating future policymakers about developmental and environmental economics with a regional focus on China.
Martha 00:00
Hello and welcome to The Course. I’m your host today, Martha, and I’m speaking with Assistant Professor Shaoda Wang from the Harris School of Public Policy. Professor Wang is a Faculty Research Fellow at the National Bureau of Economic Research (NBER) and also serves deputy faculty director of the Energy Policy Institute at UChicago, China Center. He is an applied economist with a regional focus on China. Holds a BA from Peking University, and a PhD from University of California, Berkeley.
He is here today to talk about his career path and how he became a professor at the University of Chicago.
Welcome to The Course, Professor Wang!
Shaoda Wang 00:35
Thanks for having me. So my name is Shaoda Wang. I'm an economist working on political economy, developing economics and environmental economics with a focus on China.
Martha 00:47
Lovely. So yeah, let's, let's go back in time a little bit. So this goes back to high school for you. I would love to know about sort of the origin of how you became interested in this field of study.
Shaoda Wang 01:01
So, when I was really young right before high school, the dream was to become a soccer player I quickly realized that, you know, this was not going to work out. And in high school I fell in love with physics. I thought, you know, using very elegant and rigorous models to explain how things work gives me like tremendous intellectual joy.
But I wasn't sure whether I wanted to become a physicist at the time because I feel like despite the intellectual joy, there was a missing piece, right? I always wanted to do something about China and physics is something more generally didn't allow me to have that connection.
Martha 01:46
And if I may ask, where were you in school at that time? Like, where were you living at that time?
Shaoda Wang 01:52
Yeah, so I grew up in China, went to high school, college in China, before I came to the US.
Martha 01:58
And so you were interested in how this applied to China because that was your community and your work and like the world you were living in. Yes?
Shaoda Wang 02:07
Yes, and I also think that's part of the culture, right? Like, you know, that someone who grew up, you know, being nurtured by the Chinese culture and Chinese history, there's always this sense that, you know, as a scholar, the mission is to use your intellectual abilities and your knowledge to contribute to the society.
Yeah, so I love physics. I wasn't sure whether I wanted to become a physicist. And then I remember one day in 2008, so I was watching TV and all this documentary about a Chinese economist named Justin Lin, who is actually a UChicago alumnus. He did his PhD at UChicago, you know, several decades ago.
So at the time, Justin Lin was appointed by the World Bank as their new Chief Economist. So that documentary was about, you know, his life story. He has a legendary story, if you Google him. But, you know, in that documentary, basically he was asked, you know, what's the mission of him at the World Bank.
And he answered that the mission is to eliminate poverty globally, and that really attracted me. So after the documentary, I started searching the books written by Justin Lin, and he happened to have this methodology book on economics and also a book on demystifying the Chinese economy. So after reading these books, I realized that economics works very much like physics.
We use very simple elegant tools to explain how things work, how people work. And then from the Chinese economy book, I realized that, you know, all these insights, all these tools can be applied to solving China's problems. So that really got me hooked. And then after that, I was a hundred percent sure this is what I wanted to do.
Martha 03:56
Yeah actually, can you go into more detail about, I love that that the analogy you made between physics and economics, about creating these simple tools to explain how things work and specifically you're interested in demystifying the Chinese economy. Could you speak just a little bit about what that means to you, in terms of what are those simple tools to break down, how to explain that to folks?
Shaoda Wang 04:23
So, basically, you know, in physics, when we see something we want to explain how that happens. So then we come up with very simple theoretical hypothesis, and then we can verify this hypothesis using experiments.
So we can run randomized lab experiments to understand, you know, whether this is the right hypothesis or this is the wrong hypothesis. And once, you know, we have verified the hypothesis, then we can use that to guide how we do things, right? It can be applied to engineering to all those different settings.
And in economics, it's kind of the same, right? So we see, you know, some countries are rich, some countries are poor, right? In the case of China, you know, for 2000 years, China was the largest economy, globally, and then over the past 200 or 300 years, we saw a dramatic decline of the country.
And then, you know, a big part of economics is trying to understand, you know, why are some countries much richer than others, and, you know, how to develop, big part of economics is to understand, you know, why are some countries so much richer than others. And, you know, how can we help develop those economies that are still lagging behind.
And so in essence, you know, my field is developing economics. I try to understand, you know, whether some policies can help eliminate poverty, can help reduce hunger, can help promote education, so on and so forth.
Martha 05:52
Thank you for that clarification and that expansion. So you read this and you're now certain of the path you want to take. How, what is the first step you took in making that path a reality?
Shaoda Wang 06:08
Yeah. So the first part is that I need to be able to get into a good university and major in economics. So in China, what happens is that you choose your major before you enter into college and you take this hyper competitive college entrance exam in order to get into a good college. And, you know, at the time, economics was the most popular major by far. So I had to work hard in high school in order to become an econ major in college.I actually went to Justin Lin's university and, you know, I took his course when he returned from the World Bank. And he actually wrote me a letter for graduate school application.
Martha 07:02
Yeah. Actually, no, I want to stay on there for a minute because this is a person that had really inspired you. How did it feel to meet this person and then also have them as a, you know, a professor and perhaps even a mentor? Or what was that relationship like?
Shaoda Wang 07:19
You know, so in most cases, right, when you, when you meet your childhood idol. It sounds a little bit rosy, but you demystify those guys and then, you know, they no longer have the aura that they used to have in your mind.
You know, but in this case I think that was not the case so when I took his course, and I have already read most of his books, but I still learned a lot from him just the way he treats research.
Shaoda Wang 08:02
Yeah so I still remember you know in his class I was presenting this undergraduate project. And, you know, I wanted to talk about something about, you know, how school closures happened in China over the past two decades, why we saw a dramatic decrease in number of primary schools in the rural areas. And then I remember there was this tiny little detail in the data.
And, you know, I didn't pay much attention, you know, because it wasn't the focus of the paper, but you know, Justin just wouldn't let me go to the other slide until we figure out, you know, what happened to that very small part of the data. And, you know, so that, that's something that really stayed with me afterwards.
Every time I present something nowadays, I always imagine, you know, what if there is someone like that in the audience? So I need to really master every single detail of my talk.
Martha 08:59
Yeah. So what are the things you're learning at that time and how is it helping shape what you want to do with that degree and the knowledge.
Shaoda Wang 09:10
Yeah. So critically in college, I was 100 percent sure that, you know, I wanted to do a PhD in economics. I want to become a professor in this field. And honestly, at the time, the dream was to come to UChicago to do my PhD, because, you know, modern economics was built on the Chicago School of Economics in some sense
So when I applied to graduate school, I actually did not get into UChicago, but I got into another good program, UC Berkeley. So I spent five years there. And when I look back, I think, you know, what I took away the most from the college years was that, I really had the opportunity to understand China better.
I think, you know, the college years were transformational to many people. And, you know, nowadays if I look at my friends, you know, some of them did college in China, some of them did college in the U. S., and I can see a very clear difference in the way they think about China.
Martha 10:17
Can you can you speak more about that?
Shaoda Wang 10:21
Yeah, for most Chinese students, what happens in high school is that you just spend all your time learning and preparing for the college entrance exam, so on and so forth. So, it's really after you get into college, you start interacting with other people, you start, you know, sensing the society in a much deeper way.
Right. So in college, you know, I had a lot of opportunities to conduct field works, you know, go to field trips, you know, talk to the villagers, the local bureaucrats, the business people. And I think I got a lot of insights from those visits. Some of those insights may not directly contribute to my research, but it gives me an intuition about, you know, how the society functions.
Martha 11:11
Yeah, well, I would love to know at least a couple of those insights or things you learned as a person who's never been to those villages. What were people telling you about?
Shaoda Wang 11:23
Yeah, so it's mostly about, you know, how people think, right? So, I spend a lot of time talking to different bureaucrats, right? You know, at the village level, people in the village council, but also, you know, township bureaucrats, county bureaucrats, prefectural bureaucrats, so on and so forth. And you can see, you know, how people are at different levels in different positions, have different perspectives about the same policy, about the same economic phenomenon, so on and so forth. So this helps me understand their objective functions and also the constraints that they're facing in different places. And this is really useful because, you know, when there's a new policy or when there's a new economic phenomenon, the intuition allows me to think through how different actors in this economic system are going to respond to the same shock in different ways.
Martha 12:16
Yeah. Okay. Yeah, that makes so much sense because it seems like what you're talking about is integrating, like, obviously, you're looking at data, but if you only look at data, you're not seeing these on the ground multiple perspectives of how people's feelings about policy effect the implementation.
Shaoda Wang 12:35
Yes.
Martha 12:35
Yeah. And, and like all of those diverse perspectives. So you talk a lot about like, or on your website, it talks about like political environmental and applied economy. So you're clearly interested in it. Not just theoretical, but how this really affects people's lives. How was your time talking with people in those villages? How has that affected how you think about applied economics in the real world?
Shaoda Wang 13:02
Okay, So maybe I can give you an example. The example is my PhD dissertation at UC Berkeley, which was a paper about understanding the economic cost of environmental regulation in China. So we saw the Chinese government spending so much effort trying to reduce pollution over the past two decades. And very little has been done about, you know, what are the economic consequences of all these efforts.
And the challenge of studying something like that is that environmental regulation was not randomly assigned to different regions. So we cannot simply compare a region with more regulation to another region with less regulation, compare their economic outcomes and attribute that difference in economic outcomes just to environmental regulation, because there are many other differences between these different regions.
And so, ideally, in economics, what we want is so called a natural experiment. We want a setting where the stringency of environmental regulation is almost as good as randomly assigned, across different firms or across different areas. And the question is, the question is that, you know, how do we find a setting like that? And so, when I was thinking about this question, I recalled the conversations that I had with the local bureaucrats about environmental regulation, and particularly, water regulation.
So what I was told is that basically the central government built those centralized water monitoring stations along the major river trunks. And the water monitoring stations collect water quality at that specific location. And the central government uses that water quality information to determine the promotion cases of the local guys. So if you deliver good water quality, you get promoted. If you deliver bad water quality, you get demoted or you don't get promoted. And so, then the problem I heard from the local guys is that in those water monitoring stations, because river only flow one way, or they can only capture pollution coming from the upstream, but they don't reflect any pollution coming from the downstream. And so, then that gave me the intuition that, you know, since the local guys are trying to maximize water quality readings at a specific location, then, you know, they're going to have a lot of incentives to regulate firms in the immediate upstream of the station. But they're going to have very little incentives to regulate firms in the immediate downstream.
And then there are hundreds of those water monitoring stations. So in the data, we may expect to see hundreds of discontinuities in regulatory stringency. And so I brought this idea to the data and that was indeed the case. So I wrote a paper on, you know, how regulating water quality affects the productivity of manufacturing firms nationwide.
Martha 15:58
That makes so much sense. And like, when you like at that dissertation when you did it, was that a novel concept for people? Like, how was your dissertation received?
Shaoda Wang 16:12
Well, I mean it got me the job at UChicago
Martha 16:14
Hey, all right. Yeah. So actually, yeah, let's go to there. So you, so you've got your master's at Berkeley and PhD, or am I missing a step?
Shaoda Wang 16:27
Yes, so I so basically, you know, I graduated from college, I directly did a PhD, but I think they give you a master's degree along the way for free.
Martha 16:36
I mean, well done. yeah, actually. And then, so knowing that that helped you get the job at UChicago, I do want to spend a moment thinking about who is possibly listening to this conversation, to think about what were the, like, you know, once you get the degrees and get the jobs, it's like, well, this was my path, but what were the challenges along the way?
Like the process of getting your masters, the process of getting the PhD that, you learned, you know, along the way and would you know, tell people about if they were about to go into the process.
Shaoda Wang 17:16
Yeah, so I think one thing I really mastered over the years is how to deal with rejections and negative feedback. And because if you look at an academic life, the 90 percent of that is dealing with rejections.
Every time you submit a paper, there's a 95 percent chance that you're going to have a rejection. Every time you present a paper, it's the job of the audience to tell you what you did wrong and what you need to fix, so and so forth. And so this means that, you know, we live in an environment where we pour our, you know, blood and, you know, tears into our work, yeah, and then, you know, 90 percent of the time, we receive very negative feedback on it.
And, you know, people tend to say don't take this professional feedback personally, but as far as I'm concerned, that's not possible because we invested everything into those products and we sacrificed the quality of time with family, friends, you know, with my dog, so on and so forth. So, so how can I not take it personally when some people criticize the work that I invested so much in?
So what I do is that, you know, whenever I have a rejection, whenever I face some critique that I think is unfair, I allow myself to have like two or three days where I get really pissed.
And then after that, I try to calm down and I try to zoom out and look at the bigger picture, where the bigger picture is that, you know, I choose this profession because I believe in the power of economics.
I believe that, you know, through good accountable research, we can make the world a better place. We can improve policy outcomes, we can, you know, help improve people's livelihoods, so on and so forth. So given that bigger picture, if I still believe in that, you know, despite the small setbacks, I should just, you know, shut up and keep moving forward.
That, you know, that's the process that I formed over the years.
Martha 19:23
Yeah, well, and it seems like what you're describing is a process of getting a harder shell around rejection without becoming a hard person. Like you still seem like a very open-hearted person that is trying to make the world a better place. And I think that's a tricky balance to get right where it's like, I can get over rejection, but I'm not closing myself off to, you know, my mission and feelings.
Shaoda Wang 19:50
Yeah, exactly. I think, you know, if you love the subject, if you love this topic enough, you couldn't allow yourself to be that cynical about this whole thing.
Martha 20:02
Well, yeah. Well, that makes me want to hear a little bit of the mission statement. You've said some of it already, but I think it's really useful for people to hear someone just speak their passion. So what it, you know, what is the world you want to see? And how do you think deep study and teaching and research on economics can get us there?
Shaoda Wang 20:25
Yeah. So, okay, so at the University of Chicago, I actually teach two courses. One is on the Chinese economy and the other is on Environmental Economics. And I consider these two topics to be of the greatest importance to the world that we live in today, for the rest of China and also in our environment.
And so basically I think people have a lot of irrational or wrong perceptions about this very important topics. And through my research and through my teaching, I want to help people think about these questions more clearly and probably help policymakers make better decisions about this very high-stake issues.
Martha 21:10
Well, yeah. What have you, what have you found when you are trying to talk to policymakers about your work and how can you help them understand what needs to happen?
Shaoda Wang 21:22
You know, from several pieces of my research, I tried very hard to communicate with the policymakers. And the one thing I learned is that, you know, we need to pay a lot of attention to the different objective functions of the policymakers and of the academics, right? So from our perspective, we try to write super rigorous papers, trying to pin down all the In the analysis, so forth.
But from the policy makers perspective, you know, they're trying to stay in office, get re-elected, get promoted, so on and so forth. So they don't necessarily care that much about the rigor of the study, but more, you know, how the study is going to be perceived by the more general public when we use that to inform policy.
So that's something, you know, we need to figure out when communicating academic ideas to policy makers.
Martha 22:14
Right. That makes sense. So as an academic, let's go back to the story of how you ended up at University of Chicago. So you're finishing your PhD. Walk me through the, your journey from there to where you currently teach and work.
Shaoda Wang 22:31
Yeah, so it's actually a funny story because typically when people finish their PhD in economics, they apply to like 200, 300 jobs, like all the jobs in the US and then, you know, they got a lot of interviews and then they got several offers. In my case, I was in my fifth year in PhD. I wasn't sure and I wanted to graduate in that year or wait for another year.
And at that time, I saw this job at another university. And the job description seemed like it was written for me, it seemed perfect. So I decided, you know, maybe I don't go on a full market in my fifth year, instead, I just applied to that one job. Yeah, so that's what I did. And then my advisors told me, you know, given that you have already prepared all the materials, you know, this is a big fixed cost. It's probably a good idea to apply to like two or three other positions, to the original one.
And so then I did a search on the internet. I found the UChicago position. So I decided, you know, this looks really cool. And, you know, this is like a moonshot because UChicago was always my dream school and I didn't get into it in my PhD, but you know, what the hell, I'm just going to try it anyways.
And it turned out that I got the UChicago job, I didn't got the original job that I applied.
Martha 23:51
Wow. What did that feel like to be like, well, this is my moonshot. It's probably not going to happen. What was that moment like when you found out you got it?
Shaoda Wang 24:00
Well, I, it gave me imposter syndrome for awhile, but I've been enjoying it so much over the past few years.
Martha 24:10
What do you specifically love about teaching?
Shaoda Wang 24:13
I think, you know, the process of communicating economic ideas to other people, it gives me a lot of pleasure in itself. And even today knowing that through my teaching, I may be able to change, you know, how future policymakers or business leaders think about China, think about climate issues, those things, you know, the topics that are really close to my heart, that gives me additional joy in the process.
Martha 24:45
What is something or a couple of things you have learned about the life of an academic, the life of an economist that you never could have anticipated when you came into the field?
Shaoda Wang 24:57
Yeah, I guess I didn't have a very clear idea of how the life of an economist looks like. In essence, I didn't receive any shock because I had no prior at all when I started. I just had this very vague dream of eliminating poverty, but that's that was about it.
Martha 25:15
Well, what does it look like? What does the life of an economist look like from your vantage point?
Shaoda Wang 25:22
I think it's probably similar to most other academics. In the sense that, you know, you spend time teaching, you spend a lot of time doing your research, writing your papers, doing data analysis, you know, talking to students, advising students, you go to seminars, conferences, so on and so forth.
Martha 25:43
And speaking of research, what is the research you're doing right now? Sort of what in this moment is the most exciting to you in terms of what you're researching and learning?
Shaoda Wang 25:53
Yeah, so right now, over the past two or three years, I got really interested in law economics, which is the intersection between legal studies and, you know, economic research.
And I have this recent paper on, you know, how decoupling local governments from local courts can reduce judicial local protectionism in China and how that can foster inter-regional investment, foster economic integration, so on and so forth.
So through conducting this research, I got to know another field which is in legal studies, and it opened up a lot of new insights and new research opportunities for me. So, I'm very excited about that right now.
Martha 26:38
Wow. Yeah, that's, I mean, that seems, I have so many questions, but we have so little time now, so I have two final questions. One is what do you wish since China is such, the economics of China is such a focus of your work, what do you wish people outside of China knew about the economics of China that most people outside of China do not know?
Shaoda Wang 27:02
Well, I can spend like a week talking about this topic. But let me say one thing. I think no matter how people feel about China in the US. It's always a better idea, it's always a good idea to have a better understanding of the country. So I was told this story by a colleague at Stanford University where, you know, they had this program that try to educate the policy makers in the U. S. about China.
So what they did was that, you know, they go to all the websites of the government, and then they found everyone in D. C. whose job title, there's the word China. So they found hundreds of people with job title including the word China. And then, you know, they had one on one meeting with every single one of them, asking them, you know, what do you want to know about China?
And the questions that those people asked were simply terrifying. It showed that, you know, they had absolutely zero understanding of China, but they are the ones that are making policies about China. And so that's scary because, you know, if I think about myself, I have spent more than a decade in the U.S., right now.
You know, I speak English, I read the newspapers, I talk to my colleagues, I live here, I work here, I study here. But I wouldn't consider myself a U.S. expert, and I definitely wouldn't feel qualified to advise the Chinese government on U.S. policy. Right? So the asymmetry of understanding between the two countries is something very dangerous for the whole world.
And I really hope that, you know, through my own research, through my own teaching, I can improve that at least a little bit on the margin.
Martha 28:40
So, you know, this path obviously is still unfolding for you, but it starts even just before high school. If you were to go back and be able to speak to your high school self, about what your life looks like now. What would you tell him?
Shaoda Wang 29:00
Well, I will tell him that, you know, life is great. Just keep working hard and you know, someday it will pay off.
Martha 29:08
Thank you, Professor Shaoda Wang for your time today. And Course Takers, if you enjoyed listening to today's interview, please check out the other ones. Leave us a comment, subscribe, follow, and share this episode with your friends and family. You can find out more about the University of Chicago through
uchicago.edu or the University's campus in Hong Kong through uchicago.hk.
Stay tuned for more and thanks for listening.