Inquiring minds: Q&A with Lukas Althoff

What made you decide to study economics?

I was the first one in my immediate family to attend college. When I started, I chose finance and computer science because those seemed like two fields where you could make a secure living. At the time, I didn’t really think of college as a place for intellectual growth. My first economics class changed my view of education. I was inspired by the rigorous frameworks that helped me think about complex concepts and their interrelationships—for example, the link between unemployment and inflation.

After this first experience, I decided that I wanted to take more economics classes. But in Germany, where I did my undergrad degree, the curriculum is pretty rigid. I started with online classes and reading books, only to realize that I needed a more structured experience. In my second year of college, I enrolled in a formal degree program in economics at another university, which I never really planned on finishing.

In the end, I liked it so much that I ended up finishing both degrees and, along the way, I found some really amazing and supportive mentors who led me closer to the academic career that I now pursue. 

What do you think is one of the most useful ideas in economics?

One thing that comes to mind is opportunity cost—the value of the next-best alternative that you give up when making a choice. I think that the concept is something that’s not only useful in economics but in day-to-day life too. Sometimes, we maybe have some intuitions that go against fully incorporating the concept of opportunity cost in our decisions. So, we regularly need to remind ourselves to ask, What else could I be doing with my day, or semester, or career?

Can you think of an example when you explicitly considered the opportunity costs, and did that change your course of action?

I tend to be easily excitable about all kinds of things, so it is sometimes hard for me to put a book down, say no to a new research collaboration, or skip a hiking trip with friends. I have been working to become better at this by reminding myself that with each new thing I take on, I have less time for the commitments, relationships, and activities that are already part of my life.

What economist, living or deceased, would you want to have lunch with?

I’m going to pick somebody who’s not an economist, but a sociologist and historian, W.E.B. Du Bois, who has really inspired my work in economics. Even though he himself is not an economist, he has impacted me and a lot of other economists with his work.

I really admire him not only for his work, but also for his commitment to scholarship, writing, and civil rights activism. He’s also interesting to me because he lived and worked in such a variety of places: He was born in the North, he studied in the Jim Crow South, he later spent some time in Germany, where I’m from, and then he spent his last years in Ghana. I’d love to hear about those experiences and whether and how each of them changed his perspective on racial inequality in the United States and beyond.

What are you studying now?

Partly building on Du Bois’ work, I currently study how institutions have shaped racial inequality in America. Slavery ended over 150 years ago, and looking at institutions that came after the end of slavery, I ask, How have they contributed to promoting racial equality? How have they worked against the achievement of racial equity?

One of my main projects focuses on the Jim Crow institutions that were in place for almost 100 years. There’s also other work that I’m currently doing, on pivotal policies like the GI Bill, which passed in 1944. The GI Bill doesn’t target race specifically—in statutory terms, it is completely race-blind—but in a systemic way, it has had very disparate effects on Black and White Americans.

More generally, even though some of these institutions or policies in the more recent past have tended to not address race explicitly, they often had very different impacts on various groups. Systemic inequality is something that I want to understand better.

What do you want to study next?

Besides racial inequality, what I’m interested in studying next is the impact of new technologies, including artificial intelligence, on workers and on inequality more broadly. AI is interesting to me because it both competes with and enhances human intelligence, and that likely has important implications for the value of human capital. Being able to do certain things is going to be more or less valuable when there’s a machine that can do tasks that humans used to complete.

Relative to previous big innovations, AI potentially affects a group that is usually shielded from being replaced by new technologies: high-skilled workers. So, in one specific project, I hope to study how different groups of workers are affected by AI and what that implies for the technology’s impact on the value of human capital across different groups. Are high-skilled workers going to benefit or to lose? How does that compare to the impact on low-skilled workers, some of whom have jobs or tasks that are much harder to replace with AI because they are manual?

How does your research relate to economic opportunity and inclusive growth? 

All my work focuses on equality of opportunity in one way or another, so the overlap couldn’t be bigger. There is a lot of lore around the idea that the United States is a land of opportunity. My research asks, The land of opportunity for whom? Which groups have opportunity, and which do not? I’m most interested in racial and gender inequality as well as inequality across skill groups. My projects find different ways of asking, Does equality of opportunity really exist? And what policies and institutions can help to promote equality of opportunity?

What’s an important economic statistic that you think people should know, or one that has surprised you?

Most people are surprised to learn that social mobility in the United States isn’t higher than it is in Europe, according to most measures that we have. We think of the U.S. as a country where everyone can make it from rags to riches, and we think of Europe as being very different, more rigid—but to the best of my knowledge, that doesn’t seem to be true today.

I think the interesting twist here is that people in each place have very different self-perceptions: Americans think of their society as much more mobile than it actually is, whereas Europeans are much more pessimistic about social mobility in Europe. These misperceptions have important implications for the policies that people support. In the United States, this belief that the U.S. is already so socially mobile leads people to be less willing to invest in equal opportunity policies. I think it’s not only surprising to learn about, but it also has real political consequences.

What is your favorite podcast?

My favorite podcast is the Lex Fridman Podcast. I really enjoy the long, in-depth conversations that he has with such a wide-ranging group of people. He interviews people from across the spectrum: politicians, scientists, philosophers, and other people from different fields. The topics he covers are usually a fusion of technology, philosophy, science, politics, and personal stuff that I find interesting. I also love the empathy that he shows towards anyone he interviews.

If you could do any job for one day, what would it be?

I would be a wildlife photographer. It would give me the opportunity to travel somewhere and just spend a day in nature, observing the beautiful things that are hopefully happening out there.

What’s the best piece of advice you’ve read or received? 

Prioritize sleep. That’s the best advice I’ve ever received. Sleeping well is so important, not only for productivity, creativity, memory, and other stuff like that, but also for longevity and health. When I was initially told that, it seemed a little bit counterintuitive because it feels like you’re wasting all that time asleep, but I’ve realized that it really is one of the best things one can do. Go to sleep early and wake up at the same time every morning.