WASHINGTON— Cecilia Rouse’s interest in economics dates to the early 1980s, when she was a college freshman and the country was enduring its worst unemployment since the Great Depression.
“I was drawn to the discipline because I wanted to know why this was happening,” Ms. Rouse will testify Thursday to the Senate Banking Committee, which is considering her nomination to be President Biden’s top economist. “Why had jobs disappeared—and what could be done to bring them back?”
Ms. Rouse would be the first Black person to head the Council of Economic Advisers, which was created in 1946. Her research on labor markets, education and discrimination fits squarely with President Biden’s priorities of rebuilding a labor market that has lost nearly 10 million jobs during the pandemic and addressing racial and income disparities.
“It’s an excellent nomination,” said Greg Mankiw, who chaired the CEA under President George W. Bush and taught at Harvard when Ms. Rouse was working on her economics doctorate there. “I’m not expecting to agree with her on everything, but given what President Biden was looking for, he hit a home run with Ceci.”
Ms. Rouse, 57 years old, served as one of three members of the CEA during the first two years of the Obama administration and on President Bill Clinton’s National Economic Council in 1998 and 1999. She is dean of Princeton University’s School of Public and International Affairs.
The primary role of the CEA chair is to provide objective economic analysis to the president. Its staff of Ph.D. economists brief the president on economic data, write an annual Economic Report of the President, and participate in policy discussions alongside other agencies—often seeking to stop ideas they think are bad from gaining traction.
Nominated to serve alongside Ms. Rouse at the CEA are Jared Bernstein, Mr. Biden’s chief economist when he was vice president under Barack Obama, and Heather Boushey, co-founder of the Washington Center for Equitable Growth, a left-leaning think tank. All three have focused on labor economics.
Ms. Rouse in 2010, as a member of the Council of Economic Advisers, with President Barack Obama and CEA head Christina Romer.
Photo: Pete Souza/The White House
While in graduate school, Ms. Rouse homed in on the effects of education on a person’s job prospects, writing her dissertation on the economic returns from attending a community college. The central question: Do those colleges create opportunities for students who would otherwise be shut out of higher education, or divert them from better-quality institutions?
It was pioneering work, as community colleges accounted for a large share of postsecondary enrollment but weren’t being closely researched, said Lawrence Katz, an economics professor who advised Ms. Rouse on her dissertation. Ms. Rouse’s finding—that community colleges deliver substantial economic returns when sufficiently funded—had significant implications for public policy.
“She is very much focused on the evidence and on effectiveness and will really draw on what’s been learned from the most credible research on which types of policies are most likely to have an impact,” Mr. Katz said.
Ms. Rouse’s research has continued to focus on the intersection of education and economics, often exploring issues of diversity and discrimination. One of her best-known projects found that symphony orchestras holding “blind auditions”—where a candidate’s identity is concealed—tend to hire more women.
In an op-ed for the (Newark, N.J.) Star Ledger last August, Ms. Rouse and Ms. Boushey called for unemployment benefits to be automatically enhanced at times of economic distress so that laid-off workers don’t have to rely on Congress to shore them up.
While serving in the Obama administration, Ms. Rouse flagged the potential long-term effects of high unemployment following the 2007-09 recession, said Andrew Metrick, a Yale University economist who worked alongside her at the CEA.
Until then, the U.S. economy and labor market tended to bounce back quickly from recessions because of what economists call pent-up demand. But the sluggish recovery of the early 2010s showed that recessions can leave lasting scars, particularly for workers who experience prolonged unemployment.
Ms. Rouse was among the first to recognize that “you can’t turn this off and on like a faucet, because some of these people who you’re going to rely on to get right back to work are quite discouraged workers,” Mr. Metrick said. “If you recognize that, it changes the way you think about policy, that it’s not just a matter of spending coming back. You need to have programs in place to help people to make that transition.”
In financial disclosures filed with the Office of Government Ethics, Ms. Rouse disclosed income of $523,021 in 2020 from her position at Princeton and $340,000 in fees for working as an independent director of T. Rowe Price funds and trusts.
She also listed assets of $2.17 million to $5.85 million, invested in mutual funds and in shares of around three dozen individual companies. In an ethics agreement, she pledged to sell the individual stocks within 90 days of her confirmation and to resign from T. Rowe Price and other entities.
Write to Paul Kiernan at [email protected]
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
