Rachel Griffith’s story is what tales of the American dream are made of. Having dropped out of high school, she decided after a period of time that life without an education would be less than interesting. She completed her graduate equivalency degree, known more familiarly as GED in the US, and went on to university. It was love that brought her to the UK where she completed her masters. Today, she is a professor of economics at Manchester University, the research director at the Institute for Fiscal Studies (IFS), the co-director at the Center of Microeconomic Analysis of Public Policy (CPP) and the president of the Royal Economic Society. By all accounts, the life she’s living is much more than just interesting.
At a glance
Title: Professor of Economics at the University of Manchester and Research Director of the Institute for Fiscal Studies
Field: Public economists and econometrics
Life advice: “Learn to fail constructively, there is learning through failure.”
Annual tradition: She and her husband go off the grid and disappear into the wilderness for a few weeks at time camping and canoeing
An American abroad: Her British accent is far cry from Texan upbringing (she moved to the UK as a teenager)
Latest obsession: Podcasts
In another life: She would have chosen a design-related career
The power of a healthy start in life
Much of Griffith’s work has been centered on nutrition and how it relates to public policy. Governments around the world are trying to tackle the rise in obesity rates and the effects that excess sugar consumption can have both physically and mentally. Equally as alluring to Griffith is that there is a huge data set related to the topic, which for her means that she can use tools and economics to help answer some of those questions.
“I'm most interested in the way that public policy affects people's choices,” she says. “And the way that we can use public policy to help people make better choices about their life.”
Looking at the effects of high sugar consumption in children specifically has been a compelling piece of this to Griffith. While she has looked at the effects of more restrictive advertising geared towards children, simply banning or limiting firms’ advertising and marketing efforts isn’t enough. One of the biggest reasons being that when advertising restrictions are put into place, firms compete more aggressively in price and when prices fall, people consume more.
“That's not to say that we shouldn't implement those policies, it's just that it's more complicated,” she says. “It's combining industrial organization with public economics and health to try and answer what's a big set of policy challenges that many governments are facing now.”
“The big takeaway from a lot of the work I've done on nutrition is that it's quite hard for the government to come in and change people's behavior in a constructive way, with one particular policy,” she says. “There's no real silver bullet because you change one thing in one area and then something else adjusts.”
It's quite hard for the government to come in and change people's behavior in a constructive way, with one particular policy.
Economics and globalization: when the rules no longer fit
As the world becomes more globalized and product offerings from some of the largest corporations are increasingly based on intangible assets, Griffith has set her sights on the corporate tax field as well.
“The principle we have in international taxation at the moment is the country that gets to tax the income is the country in which the value that the firm generates is created,” says Griffith.
She uses an American coffee retail giant to illustrate this point. The brand’s reputation, which is generated in the US, is reflected in prices globally but should it be? And what about tech companies with international user bases, how do you clarify what the value is and where it is generated?
“It's the forefront of where the real tension lies,” she says. “And really what's needed is a complete rethink of the way that we tax companies.” While the words “complete rethink” may imply a complicated overhaul, Griffith has a fairly straightforward proposal; a reversal in the system.
“What if we said let's tax the income where it is credited to a person, the way we tax people's personal income tax,” she asks. “You could do the same thing with corporate income. Switch it around, tax it at the place where the income is. The question is whether that's really going to be beneficial to consumers or not and lot of that is around the politics of it rather than the economics of it.”
What's needed is a complete rethink of the way that we tax companies.
Why you shouldn’t always go with your gut
For all of her success and stature in the field, Griffith is not only humble but has a refreshing take on learning and failure.
“If you want to push the frontier forward, you absolutely have to be willing to fail,” she says. “I think teaching people to fail constructively is one of the most important things to do. You learn from totally falling flat on your face and picking yourself back up again and moving forward. If you're not doing that, you're not pushing yourself forward.”
She knows that this doesn’t come naturally to most, especially those who have experienced some success. In her own career, she tells us of two instances where her intuition was not exactly aligned with the data and how opening herself up to those learnings produced inspiring results.
“It’s the power of curiosity driven research,” she says. “A good researcher is to be willing to give up your preconceptions.”
If you want to push the frontier forward, you absolutely have to be willing to fail.
Pushing the frontier forward
When Griffith was appointed as the president of the Royal Economic Society (RES) for 2019/2020, she became the second female to hold the title since it was founded in 1890. While she acknowledges the number of women in economics has plateaued, calling it “a billion-dollar question” as to why, it is milestones like these that make her feel hopeful.
“It feels like it's a sign of changing times,” she says. “I grew up as an economist being often the only woman in the room. But I think that that is changing and I do see that changing now.”
In the UK, economics is no longer being taught to A level students who are roughly 16 years old. Because of this, Griffith thinks that the younger generation no longer sees economics as an enabling discipline and when given the choice, they simply don’t know what economics is about.
“We've been doing a lot of work recently at the RES, going into schools and asking kids what they think economics is and it's all about money, banking, finance,” she says. “They aren't seeing that economics is about a much broader set of issues, a toolkit to let you think about how people make decisions and choices. Once you tell them that, they become a lot more interested.”
Of all of her many positions, the Institute for Fiscal Studies (IFS) holds a special place in Griffith’s heart and a lot of that comes from the type of institution it has become.
“I’ve been there for 26 years,” she says. “It's incredibly friendly, dynamic and supportive and I feel very much a part of having created what it is now, which I think is a rather unique institution in the way it combines academic work with policy influence.”
It has a 50/50 gender split, something still very rare in economics, according to Griffith.
“We're at the forefront of academic research,” she says. “It's not an easy ride but it's very fair. It's very supportive. It's very nurturing to people who want to get ahead.”
Because of the variety of her own roles, Griffith is uniquely positioned to watch as economics evolves as a field but also to influence the shape it takes. To her diversity means more than a gender balance, it means multiculturalism, a range in socioeconomic backgrounds and an interdisciplinary approach to the work.
“I think that gender is an important issue but it's kind of the most visible issue,” she says. “In the UK, most people who study economics come from wealthier backgrounds. It's really important that you have people from a diversity of backgrounds and people that grew up in different circumstances and can maybe personally relate to what life's like when you're in a working-class householder or in poverty.”
“For me, as an intellectual economist, gender isn't the key thing,” she says. “There's an issue in ethnic minorities that's probably worse than gender.”
Understanding where the boundaries of economics are and where other disciplines can help is paramount to Griffith.
“There are many areas where economists can learn a lot working with and collaboratively with other disciplines,” she says. “You don't have to come from Harvard or MIT to be a successful economist,” she says. And she is living proof.