S1E27: Interview with Kyle Kretschman, head of economics at Spotify

In this week’s episode of The Mixtape with Scott, I had the pleasure of interviewing Kyle Kretschman, Head of Economics at Spotify. It was a great opportunity for me because Kyle is one of the first economists I have spoken to who didn’t enter tech as a senior economist (e.g., John List, Susan Athey, Michael Schwarz, Steve Tadelis). Kyle entered tech straight out of graduate school. He spent much of his career at Amazon, a firm that has more PhD economists than can be easily counted. Under Pat Bajari’s leadership there, Kyle grew and his success was noticed such that he was then hired away by Spotify to lead up their economics team. At the end of the interview, I asked Kyle an economics article that has haunted his memories and he said “BLP”, which is affectionate shorthand that “Automobile Prices in Market Equilibrium” by Berry, Levinsohn and Pakes 1995 Econometrica goes by. I really enjoyed this interview, and despite the less than ideal sound quality at times, I hope you will too.

But before I conclude, I wanted to share some more of my thoughts. This series I’ve been doing on “economists in tech”, which has included interviews with John List, Susan Athey, Michael Schwarz and Steve Tadelis, comes from a complex place inside me. First there is the sheer curiosity I have about it as a part of the labor market for PhD economists. As I have said before on here, the tech sector has exploded in the last decade and the demand for PhD economists has grown steadily year over year. Tech demand selects on PhD economists with promising academic style research inclinations. There is substantial positive selection in this market as firms seek out strong candidates can be produce value for them. This is reflected in both junior market salaries, but also senior. Job market candidates are economists with technical skills in econometrics and economic theory, not to mention possess competent computer programming skills in at least one but often several popular coding languages. They are also candidates who were often entertaining careers within academia at the time they entered tech, and in those academic careers, they envisioned themselves writing academic articles about research they found personally and scientifically important and meaningful. Going into tech, therefore, would at least seem to involve choice that may go far beyond merely that of taking one job over another. It may involve a choice between a career in academia and a career outside it, which for many of us can feel permanent, as though we are leaving academia. And for many economists, it may be the first time they have ever contemplated such a thing. If they do internalize the story that way, if they do see taking a job in tech as “leaving academia”, then I can imagine that for at least some economists, that may be complicated, at least.

But there’s another reason I have been wanting to talk to economists in tech and that is I am very concerned about the welfare of our PhD students. In a recent article published in the Journal of Economic Literature, economists interviewed graduate students in top economics programs. They found there incredibly high rates of depression, anxiety, loneliness and even suicidality. This is a common feature of graduate studies, but it is interesting that PhD economists have incredibly good employment opportunities and yet the depression and anxiety plague there too. One of the things that struck me in that study was the disconnect between what graduate students felt about their work and what their advisors felt about their own work. Many students, for instance, do not feel they are properly supported by advisers, do not believe their advisers care about their research success and do not even care about them as a person. Whereas most Americans (and faculty) feel that their work has a positive impact on society, only 20% of PhD students in economics feel that way. (I discussed the article as well as my own research on the mental health of PhD students here.)

I suppose part of me feels a great sigh of relief to see the labor market for PhD economists expanding in light of those troubling statistics. If students know that life is full of infinite possibilities, then perhaps they can begin to process earlier what they want to do in the short years they have on this small spinning ball of rock we call Earth. If students do not in the end want to become professors, if they do not have the opportunities to become one, they should know that there is no “failure” involved there. Careers are just that — careers. They do not tell us who we are. The sooner a student can detach from the unhelpful story that our value is linked to a vita listing our accomplishments, the sooner they can begin their own life work of choosing their meaning. Can having more labor market opportunities with more employers competing for them help do that? Well no, not really. At least, not exactly. It can disrupt certain equilibrium, but then the new equilibrium can just as easily cover that up too. Still, I do like the idea that to keep students in academia, universities and departments must fight harder for them, pay attention to them, and invest in them as people. I like the idea that students have more options and that the options are diverse. Will it help their depression? Well, that’s another matter, as that’s complex. And presumably the economists in the survey I mentioned were themselves well aware of the career options they had since they were coming from the nation’s top 10 PhD programs in economics.

I suppose my point is that ultimately, the burden of life really cannot be resolved with money or career. We are trained to look there because we have boundless appetites. But ultimately the hard work of navigating life can only be helped so much by a job. We must still decide for ourselves what meaning we will choose for ourselves. But one thing I know, and one thing which I think our profession is profoundly bad at saying out loud, is that if we make our identity connected to vitas, we will not just be miserable, we will be hopeless, and probably poisoned. Such a mindset leads to endless laps on a brutalizing treadmill of meaningless performance in which a person chases for first place in a race they don’t remember signing up for and which they cannot win. They compare themselves with others running, not knowing that they too are brutalized by their own treadmill, not realizing that it is impossible to catch up with someone else as there is always someone else ahead of us. The sooner we learn that the joy we long for will not come when we get a top 5, the sooner we can look elsewhere. It has taken me many years to relearn a lesson I learned decades ago — I am whole now. I am complete now. I still run, and I still chase, but I am not chasing completeness. I am not chasing my own wholeness. Being whole and complete has nothing to do with a career. Careers are ultimately orthogonal to hope, which does not mean they do not matter — they absolutely matter. But if asked to deliver meaning, we will find that our jobs are as weak as wet spaghetti at such a task as that.

So, I suppose in some ways I simply want to announce — there are incredible opportunities for economists inside government, commerce and academia. But the weight of this life is not likely to be lighter in any one of them, for the weight we feel in life is largely self imposed, inside us, in the stories we tell about who we are and for many of us who we are not. Those stories are real, because we feel them and because we believe them, but they are not true. All stories are wrong, but some are useful, and the story that our lives can only matter if we have certain types of jobs or certain types of success, while it may be useful to getting a paper out or accomplishing something important, in a much bigger sense it is hollow at best and pure poison at worst.

TRANSCRIPT

This transcript will be updated once the more complete transcript is finished; for now it was transcribed using voice-to-text machine learning.

Kyle Kretschman:Might not have prepared myself well enough to be attractive for some of the most pop most top tier schools. Scott Cunningham:In this week's episode of the mix tape with Scott, I had the pleasure of interviewing Kyle kretchma the head of economics at the streaming platform. Spotify. Before I dive into the interview, though, I wanted to give you a bit of a heads up about the sound quality. Unfortunately, the sound quality in the interview on Kaza side is a bit muffled. We discussed refilming. It tried to find a way to tweak it, but there were certain constraints on the actual sound itself that kept us from being able to do it. And we didn't feel that refilming, it would be good because we thought that the interview had a lot of serendipitous kind of spontaneous tangents and things spoken about that. We thought students and people in academia would want to know, would need maybe even need to know. And I doubted that I could recreate it, cuz I don't even know why it happened. Scott Cunningham:S