Improving Economic Opportunity in the United States
- Near-term policy solutions aimed at reducing these barriers include running tight labor markets, infrastructure investment, direct job creation, health care and other work supports, apprenticeships, and more.
.. Janet Yellen recently noted that unemployment rates “averaged 13 percent in low- and moderate-income communities from 2011 through 2015, compared with 7.3 percent in higher-income communities.”
.. Racial disparities exist in unemployment rates even controlling for education.[3] Among white people with terminal high school degrees, unemployment was about 5 percent in 2015. For black people, it is twice that.
.. Black people with at least BAs have unemployment rates of 4.1 percent, compared to the 2.4 percent for whites with at least BAs.
.. While employment levels fell about the same amount in percentage terms in both areas over the Great Recession of 2007-2009, metro employment has recovered much more quickly
.. Rising income inequality provided high-income households more resources, and parents used these resources to purchase housing in particular neighborhoods, with residential decisions structured, in part, by school district boundaries.
.. Yellen noted that close to 100 percent of children of parents with higher incomes and levels of educational attainment pursued higher education, and 60 percent earned a bachelor’s degree. But among children of parents with lower incomes and education levels, 72 percent pursued higher education and only 14 percent completed a BA. The figure below, from Chetty et al., shows that the likelihood that a child from a wealthy family will attend an Ivy-league or similarly elite school is 50 times that of a child from a low-income family.
.. children who grow up in affluent households but do not graduate from college are 2.5 times as likely to have high incomes in adulthood as children who grow up poor but do graduate from college
.. Other OECD countries spend 5 times what we spend on young children, often through pre-kindergarten education, despite the fact that solid research shows the benefit-cost ratio of such spending to be more than 8-to-1
.. In the presence of high inequality, stronger growth is necessary but not sufficient to take down mobility barriers. If most of the growth flows to the top of the scale, as has occurred in recent decades, then absent aggressive redistribution, we cannot expect to push back on the many problems just documented.