‘I Always Have a Real-Life Question in the Back of My Mind—It Motivates Me to Search for an Answer’
Behrang Kamali-Shahdadi, from Iran, recently joined the HSE University Department of Theoretical Economics as an assistant professor and will start teaching courses in autumn 2023. In his interview, he shares his experiences of getting a PhD from an Ivy League university, working at a new university in Iran, and his research on matching attorneys to poor defendants, unskilled workers to firms, and baby boomers to universities.
Behrang Kamali-Shahdadi
— How did you start your career in economics?
— I got my bachelor’s degree in industrial engineering, but for my master’s degree I switched to economics. I always liked social sciences, but because of the university system in Iran I went to an engineering school. My bachelor’s programme included two economics courses, and that was the start of my journey in economics. After taking these two courses, I began reading some textbooks, blogs and so on. Then I obtained my master’s degree from Sharif University in Tehran, after which I applied to do a PhD at the University of Pennsylvania.
My PhD was very fast because I wanted to go back to Iran and didn’t want to go into the job market. I was a bit lucky, since I had three projects in the middle of the fourth year of my PhD programme. I was on track to complete my PhD at the end of the fourth year, and my academic advisor agreed that these three projects would be enough.
— What did you do after completing your PhD?
— In 2016, I went back to Sharif University. After I started working there, it turned out that there was a group of professors who, like me, had just completed their PhDs. The largest private bank in Iran wanted to sponsor a university, and the head of this bank asked us to establish an institute focused on economics and finance. In 2017, Tehran Institute for Advanced Studies (TeIAS) accepted its first students.
I think it was quite impressive at the beginning, because almost all good universities in Iran are public—we were the only exception.
TeIAS is the first private university that could compete with the best public ones in terms of quality.
There was a huge number of people involved, including an advisory board outside of Iran and other founders in the UK and US. However, we had just five faculty members who were directly engaged in teaching at the economics and finance department.
TeIAS was also the first university—public or private—to offer a reasonable stipend to students. We wanted to ensure that they could study without working at the same time. We attracted a lot of good students, and our alumni were admitted to PhD programmes at leading universities all over the world.
— Tell us about your research.
— My research interest is basically matching theory, but I always think about some real-life question in the back of my mind—it motivates me to work with the problem and search for some kind of answer. At the same time, I want my findings to be a new theoretical result.
For example, three of my articles are about markets that have two sides. These two sides have different kinds of agents, and they are going to match together. However, after they match, something will happen. Matching literature usually looks at something like the marriage market or college admissions, where either one agent on one side matches another agent on the other side or several agents on one side match with one agent on the other side, and that’s it. The literature usually considers the matching problem without looking at what is going to happen after the match. I wanted to see what happens after the agents match.
The solution concept that we usually look at in matching markets is stable matching.
If you let agents just look around, try to find the right partner, and they are both happy in the match, that’s what we call a stable matching. I wanted to look at markets that are not stable.
I wanted to consider a case in which we move to a market where frictions exist because people are doing something either by law or tradition.
In one of my articles, I checked whether sorting of students (which is a market outcome) increases their average performance (Shahdadi, 2021). It’s clear that the top student will be better off and the bottom student will be worse off, but what happens to the average one when we sort students into two different classes or schools?
In another project, I looked at the legal market in the US (Shahdadi, 2018). If you are the defendant in a criminal case and you don’t have money to hire an attorney, the government is supposed to find one for you. Currently, the government just assigns each client to an attorney randomly, but there is a debate about whether clients should be able to choose an attorney. I show that in this case, the system would actually be worse off.
— Tell us about your research on the baby boom in Iran.
— Forty-five years ago, there was a revolution in Iran, and then a war with Iraq. Due to the war, we had a huge baby boom. However, when you look at universities, it’s interesting to notice that the number of female students increased significantly, while the growth in the number of male students was not that high considering the baby boom.
I wanted to explain the increase in female college attendance with the help of the marriage market—for women, having an education increases bargaining power.
However, I’m still working on that and I don’t have final results yet.
— Tell us about your article on matching unskilled/skilled workers to firms.
— That’s another project where I wanted to compare different kinds of matching. I wanted to see what would happen to GDP if we eliminate the search friction in the matching market (specifically in the labour market). We know that if we eliminate friction, welfare goes up. However, there is literature in macroeconomics that basically wants to measure welfare by using GDP as a proxy. What I show in this paper is that there are some conditions under which GDP and welfare do not move in the same direction. I identify a set of conditions under which you can increase the labour market efficiency, and welfare will go up, but GDP will go down because people will work less. If you see GDP as a proxy for welfare, you will suppose that something bad is happening, but actually it’s something very good. Thus, we care about welfare but we are unable to measure it. We can measure GDP, and I show under what kind of conditions these two things move in different directions.
— You got your PhD from the University of Pennsylvania (UPENN), which is an Ivy League member. Did you feel that you belonged to UPENN and the Ivy League as a whole?
— The Ivy League is a huge brand, but mostly for undergrads. When I was a teaching assistant for bachelor’s students, I could see that these were amazing students.
Having such bright, sharp and super-intelligent peers is one of the benefits of learning at an Ivy League.
The second benefit is being close to other departments in the university. At UPENN, thanks to the Ivy League culture, the schools are so close. I was in the economics department, but I could attend seminars and talk to professors in the Wharton Business School, in the engineering department, the computer science department and so on. I also audited four or five courses from other schools, and all the professors were really welcoming.
The third benefit of an Ivy League is the network. People from different firms came, talked to us, and invited us to join their firms just because they were UPENN graduates and there was a huge network of alumni at their firms. They offered us internships with the possibility of getting a job later.
— Does UPENN have a lot of international students at the undergraduate level?
— Yes. During the summer, I taught a course for advanced high school students who wanted to get into UPENN or other universities. Around 15 students were enrolled in this course, and almost all of them were from other countries. They came from all over the world to take this course and get into somewhere like UPENN. Based on my experience as a teaching assistant there, I would guess that one third of undergraduate students came from foreign countries.
In graduate school at UPENN, two-thirds of my cohort were international students.
— How do most UPENN undergraduates continue their career after they graduate?
— I think that most students go into the private sector. For example, approximately 150–200 students were enrolled in the intermediate microeconomics course for which I worked as a teaching assistant, but only 10 or 20 students entered PhD programmes. So, most students go to the private sector and don’t continue their education. I think in most countries, students decide to get a master’s degree after completing their bachelor’s degree, but in the US, master’s degrees aren’t very popular. After undergraduate programmes, students go to PhD programmes or into the job market.
— Have you worked only in academia or have you also worked in the private sector?
— Mostly in academia, but I also did some consulting while I was at the university. Nevertheless, my primary job was always academic. When I was an undergrad at engineering school, I had never thought about doing a PhD. However, when I took a graduate-level economics course, I became very interested in research in this field. After that, it was all I wanted to do.
References
Ahmadzadeh, A., & Kamali-Shahdadi, B. (2023). Matching Unskilled/Skilled Workers to Firms Facing Budget Constraints (No. 23-1446). Toulouse School of Economics (TSE).
Shahdadi, B. K. (2021). The effects of student composition on teachers' effort and students' performance: Implications for tracking, school choice, and affirmative action. Games and Economic Behavior, 130, 384-399.
Shahdadi, B. K. (2018). Matching with moral hazard: Assigning attorneys to poor defendants. American Economic Journal: Microeconomics, 10(3), 1-33.
Shahdadi, B. K. The Asymmetric Effects of Baby Boom on Education and Housing
Interview and text by Olga Krylova, intern at the International Office of the Faculty of Economic Sciences, third-year student of the HSE and NES Joint Programme in Economics
Behrang Kamali Shahdadi