Bailey was born on November 26, 1938, in New York City to Henrietta Dana Raymond and Irving W. Raymond, both of whom were history professors. She was the second of five daughters in the family.[3] She grew up in New York City, where she graduated from the Chapin School in 1956. She received her bachelor's degree from Radcliffe College, a master's degree from Stevens Institute of Technology and her Ph.D. from Princeton University,[4] where she was the first woman to receive a doctoral degreeineconomics.[5]
Bailey started her career working as a computer programmer at Bell Laboratories. Bailey worked in technical programming at Bell Laboratories from 1960 to 1972, before transferring to the economic research section from 1972 to 1977.[5] She was the first woman appointed a department head (the economic research section) at Bell Laboratories.[5] During her time there, she was part of a group that studied monopolies and regulatory distortions, and even gave presentations on the topic to AT&T executives and advisors including William Baumol and Alfred E. Kahn, with whom she would later go on to collaborate.[3]
In 1977, President Jimmy Carter named Bailey the first woman Civil Aeronautics Board (CAB) commissioner. In 1981, she was named the first woman vice chairman of the agency by President Ronald Reagan.[5] Between 1977 and 1983 she served on the Civil Aeronautics Board, where she oversaw the deregulation of the airline industry in the United States.[6] Bailey studied deregulation and regulatory capture through her career and contributed to the passage of the Airline Deregulation Act, a 1978 United States federal regulation that freed airlines from government control in pricing, route planning, competition and market composition.[7] Colleagues of the time including economist Kahn, noted her to have been the fiercest proponent of deregulation in the committee.[5] Outside of the field of deregulations, during her time at the CAB, she also pushed for the rights of non-smokers to be guaranteed a smoke-free seat in airlines, not liking cigarette smoke herself.[5]
Bailey was noted to have opened opportunities for women in economics. An obituary in The Washington Post called Bailey a "pathbreaker for women in economics".[7] She was the first woman to graduate with a doctorate in economics from Princeton University and was often among the lone women in various corporate boards. During her confirmation hearing in the late 1970s to become the Civil Aeronautics Board commissioner, she was asked by Ted Stevens, a senator from Alaska, about her "steel" to which she is noted to have remarked that she was "tougher" than she looked.[7]
