Category: Human Capital

Can letting kids watch TV make them better students?

Posted on by Pedro Spivakowsky-Gonzales

With the end of the 2013-14 school year, families across the nation are turning to decisions about what to do with their kids over summer vacation. Some will be looking at summer camps away from home, others at summer sports or academic camps in their communities, and still others at how to keep track of their kids in the neighborhood while at work.

For those families at the low and middle rungs of the economic ladder, those without the resources to send children to camp or to other organized activities, the decision sadly is often whether to park the kids in front of the TV all summer or leave them to roam the neighborhood. But how will letting kids watch TV affect their academic performance?

This year’s winner of the John Bates Clark Medal—known as the ‘Baby Nobel’ prize in Economics because it is awarded annually to the best economist under forty—may have an answer. Matt Gentzkow, a Professor of Economics at the Chicago Booth School of Business won his award in part because of his application of empirical methods in microeconomics to interesting questions.

This announcement may also be celebrated by TV-loving children across America, who would likely approve of the findings in his 2008 paper Preschool Television Viewing and Adolescent Test Scores: Historical Evidence from the Coleman Study (with fellow Chicago Professor Jesse Shapiro). In this paper, Gentzkow and Shapiro find that watching TV in early childhood did not negatively affect standardized test scores in adolescence for the first generation raised watching TV, born between 1948 and 1954.

Those children are now the grandparents and great-grandparents of today’s children, who can happily point to these research findings as they attempt to convince their elders not to take away the remote (with the argument that learning from television is even remotely possible). Of course, what is shown on TV these days is not the same as what was shown on TV then, but kids might argue that whether TV today is more or less educational is a question that can only be resolved with further observation.

Seriously though, the paper finds that the (marginally statistically significant) positive impact of TV-viewing at a young age was largest for children from underprivileged households, including those where English was not the primary language and where mothers had less than a high school education. In contrast, according to Gentzkow and Shapiro, “children whose home environments were more conducive to learning were more negatively impacted by television.”

The reason they provide is that for children in privileged households, time spent not watching TV was more likely to be spent on activities conducive to higher test scores: “this evidence would lead one to expect that television is more beneficial to children from more disadvantaged backgrounds, because for such children the activities crowded out by television are likely to be less cognitively stimulating.”

Even if the authors find that watching TV may not be as harmful as the vast majority of pediatricians believe, their assessment of the differential impact of television on children from privileged and underprivileged households suggests that there are things other than excessively watching television that children could be doing that might help their cognitive development more than sitting in front of a television screen.

For example, children could attend pre-school or other forms of organized educational programming. They could read or engage in physical exercise. In addition, they could use digital technology, which has created a whole host of other activities that might foster cognitive development more effectively than television, such as certain interactive games and applications. Of course, whether these activities are mostly beneficial for the children depends crucially on what they are trying to teach.

If Gentzkow’s research on how watching television in early childhood affects later educational outcomes can lead some to consider alternatives to television for their educational value, then someday children may appreciate this Clark Medalist not for the excuse to watch television, but for the excuse not to.

 

Pedro Spivakovsky-Gonzalez is a junior economist at the Washington Center for Equitable Growth

Extended unemployment insurance remains critical

Posted on by Jesse Rothstein

Unemployment Insurance is designed to help workers who are displaced, through no fault of their own, until they can find new jobs. It is natural to extend these benefits when the labor market is weak and job searches take longer to result in a new job. But benefits should not be so generous that the recipients delay taking new jobs.

Balancing these two policy prescriptions is difficult politically. Yet new analyses of recent data covering unemployed workers during the Great Recession and its aftermath indicate that the impact of unprecedented extensions of Unemployment Insurance on job uptake were smaller than previously thought while the benefits were extremely important to maintaining family incomes. The program helped sustain families and communities during an unusually long period of weak labor demand, helping to promote long-term labor market resiliency and higher future prosperity by helping the long-term unemployed remain out of poverty and attached to the labor market.

Extended Unemployment Insurance benefits expired at the end of 2013, and Congress is now considering whether and how to reinstate them. The new data and analysis detailed in this issue brief—based on the roll-out of extended benefits in 2008-2010 and the roll-back that began in late 2011—indicate that old views of the design of Unemployment Insurance need some updating. Specifically, the downsides of UI extensions are smaller than in past economic downturns, and there are some previously unanticipated upsides. Congress should take these findings seriously as it considers a possible reauthorization of the Emergency Unemployment Compensation program this year.

Read a PDF of the full document

 

Current labor market conditions

Unemployment insurance extensions are only authorized in weak labor markets, and understanding their effects requires understanding the context in which they operate. Although the Great Recession officially ended in 2009, a full five years later the labor market is still quite weak. The unemployment rate has fallen, from a peak of 10.0 percent in October 2009 to 6.7 percent in March 2014. But the share of the adult population that is employed is only 58.9 percent, down a full 4.0 percentage points from before the Great Recession and lower than at any point between 1984—when female labor force participation was much lower than today—and 2009.  And the long-term unemployment rate, the share of the labor force that has been out of work for six months or longer, remains extremely high.

This crisis has been devastating for working people. More than 30 million “person-years” of employment were lost.[1]  This represents potential earnings that vanished without a trace, cutting deeply into family budgets. And the overhang from the extended period of extreme labor market weakness will extend the pain much further, in at least three distinct ways.  First, the weak labor market held down wages even for those workers who kept their jobs—the median full-time worker has not had a real wage increase in a decade. Second, workers who lost their jobs will probably see long-run declines in their earnings, as high as 20 percent per year for as long as 20 years.[2] Third, the cohorts of young people who have entered the labor market since the crisis began have had trouble getting their feet on the bottom rungs of the career ladder. This, too, will have long-lasting effects, depressing wages for much of their lives.[3]

The most important component of the policy response to a shock of this magnitude must be to ensure that the economy recovers quickly so that the damage does not continue. On this score, policymakers in Washington have done exceptionally poorly.

A second important component is to cushion people from the ill effects of the crisis while it lasts. Unemployment Insurance is a very important part of this cushion. Ideally, it should help fill in the hole in household budgets that is created when a worker is laid off, allowing the family to maintain its consumption during the job search.

The design of unemployment insurance policy trades off two objectives: We want to insure workers against job losses, but we don’t want to create incentives for workers who have lost their jobs to delay finding new work. The former pushes us toward more generous benefits—higher replacement rates and longer durations—while the latter consideration pushes in the opposite direction.

There has always been good reason to think that the insurance function of Unemployment Insurance is more important in weak labor markets. When there are few jobs to be had, it takes displaced workers a long time to find new jobs and job seekers thus need more support. At the same time, incentive problems are less severe in weak labor markets—jobless workers will be loathe to turn down an available job in the hope of something better, and even if these incentives do dissuade a worker from taking a job, there will be a long line of other workers ready to fill the open position, with little net impact.

This argument provides a rationale for a policy of making Unemployment Insurance more generous in downturns. And indeed this is what we saw early in the Great Recession:  Where traditional UI benefits have averaged about $300 per week for no more than 26 weeks during the early years of the crisis, Congress both raised benefit levels, by $25 per week as part of the 2009 Recovery Act, and dramatically extended their duration, to as many as 99 weeks through much of 2010 and 2011.

Although this expansion was entirely consistent with the best understanding of optimal policy, it was quite controversial. Opponents argued that it would dissuade displaced workers from taking new jobs, and some have even attributed nearly the entire rise in unemployment during 2007-2009 to the disincentive effects created by extended Unemployment Insurance. [4] But these arguments are not well founded in the evidence. New data indicate that the recent extensions reduced job-finding rates [or job search efforts] only minimally.

Examining the most recent data

The roll-out of extended Unemployment Insurance benefits in 2008-2010 and the roll-back that began in late 2011—UI durations are now only about a quarter of their 2009-10 maximum—created a natural experiment allowing researchers to study the effects of extended UI benefits in weak labor markets. These studies indicate that old views of the design of Unemployment Insurance need some updating. Specifically, the downsides of UI extensions are smaller than in the past, and there are some previously unanticipated upsides.

The evidence indicates that extended Unemployment Insurance does reduce the likelihood that an unemployed worker will find a job in any given month, but by much less than we previously thought.  Moreover, extended UI benefits have an important countervailing effect:  Many unemployed workers who would have given up their job searches and exited the labor force are persuaded to remain in the job market because benefits are available only to those actively searching for work.  This effect is at least as large as the effect on job finding.[5]

The effect of Unemployment Insurance extensions on labor force participation may turn out to be very important in the long run.  An important concern as the weak labor market drags on is that workers who have been out of work for years or more may become detached from the labor market and unable to return to work. Any such effect would cast a long shadow over our future prosperity.[6] Although evidence is limited, the data appear to indicate that UI extensions help to reduce worker disconnection from the labor market, [7] and thus play an important role in returning our economy to eventual health.

Despite the accumulation of evidence that UI benefits are doing little to dissuade displaced workers from finding jobs, and may even be having a positive net effect on the labor market, the UI extensions put in place in 2008-2010 have been allowed to expire. Benefit durations have fallen to only 26 weeks in most states, just over a quarter of their peak level, and in some states they are much lower. North Carolina, for example, has cut durations to as short as 12 weeks, and has reduced benefit levels as well. As a consequence of these cuts, hundreds of thousands of workers have been thrown off Unemployment Insurance who might otherwise have received it.

Not surprisingly, this has done nothing to improve the labor market, which is limping along just as slowly now as it was in 2012 and 2013, before the UI extensions expired. There remains no sign that employers are having trouble filling most jobs, as would be expected if UI benefits were discouraging recipients from taking work. The evidence still points overwhelmingly to labor demand shortfalls as the primary problem.

The cutback in UI benefits has, however, imposed great hardships on families and their communities. In recent work with Rob Valletta of the Federal Reserve Bank of San Francisco, I examined the trajectory of family incomes from initial employment, through job losses to spells of UI receipt, and then through UI exhaustion at the end of the spell.[8]  We found what one would expect: Earnings fall dramatically when a worker loses his or her job, and UI benefits make up only about half of that loss on average.

052614-UI-webgraphic

When these benefits expire, family income takes another dramatic fall.  Some families turn to the Supplemental Nutrition Assistance Program (formerly called food stamps) or other government assistance programs, while others turn to early retirement and Social Security payments for support. But most families are able to do neither, and thus must live with sharply reduced incomes. The average recent UI exhaustee’s family has only 70 percent of its pre-displacement income. Many families, particularly those that previously had a single earner, have much less than this. These families are likely to have exhausted their savings long before, and thus face real hardship. Well over one-third of exhaustee families fall below the poverty line.

This is devastating to families. It also hurts their communities: Families without income to spend cannot support local merchants or service providers or make rent or mortgage payments, so the expiration of UI sends ripples throughout the local economy. Needless to say, few local economies can afford this right now, and the drag created by the expiration and exhaustion of Unemployment Insurance threatens to bring an already slow recovery to a dead stop.

Extended UI benefits cannot be the whole of our policy response to the ongoing weakness of the labor market. Many workers displaced in the downturn have outlasted even the maximum benefit extensions, and will need other forms of support to allow them to survive. And UI extensions alone will not provide enough of a fiscal boost to support a robust recovery. But the fact that this one tool will not finish the job cannot justify not starting. And the evidence that has accumulated during the Great Recession and the subsequent tepid recovery demonstrates that Unemployment Insurance is a useful and important tool, and that the recovery would have been even weaker and slower without it.

Jesse Rothstein is associate professor of public policy and economics at the University of California, Berkeley. He joined the Berkeley faculty in 2009. He spent the 2009-10 academic year in public service, first as Senior Economist at the U.S. Council of Economic Advisers and then as Chief Economist at the U.S. Department of Labor. Earlier, he was assistant professor of economics and public affairs at Princeton University. He received his Ph.D. in economics from UC Berkeley in 2003. 

Endnotes

[1] A person-year represents one person employed for one year. I calculate this as the increase in the number of person-years of unemployment from what would have obtained had the unemployment rate remained at its November 2007 level of 4.7%. This assumes that the weakness of the labor market was not responsible for the sharp decline in the labor force participation rate, so is a substantial underestimate.

[2] See Jacobson, Louis S., Robert J. LaLonde, and Daniel G. Sullivan. “Earnings losses of displaced workers.” The American Economic Review (1993): 685-709; von Wachter, Till M., Jae Song, and Joyce Manchester. “Long-Term Earnings Losses due to Job Separation During the 1982 Recession: An Analysis Using Longitudinal Administrative Data from 1974 to 2004.” Working paper (2009).

[3] See Oreopoulos, Philip, Till von Wachter, and Andrew Heisz. “The short-and long-term career effects of graduating in a recession.” American Economic Journal: Applied Economics 4.1 (2012): 1-29; Oyer, Paul. “The making of an investment banker: Stock market shocks, career choice, and lifetime income.” The Journal of Finance 63.6 (2008): 2601-2628; Kahn, Lisa B. “The long-term labor market consequences of graduating from college in a bad economy.” Labour Economics 17.2 (2010): 303-316.

[4] Barro, Robert.  “The Folly of Subsidizing Unemployment,” Wall Street Journal, August 30, 2010. http://online.wsj.com/news/articles/SB10001424052748703959704575454431457720188. See also, Hagedorn, Marcus, Fatih Karahan, Iourii Manovskii, and Kurt Mitman, “Unemployment Benefits and Unemployment in the Great Recession: The Role of Macro Effects.” National Bureau of Economic Research working paper 19499, 2013.

[5] Rothstein, Jesse. “Unemployment insurance and job search in the Great Recession.” Brookings Papers on Economic Activity Fall (2011): 143-213; and Farber, Henry S., and Robert G. Valletta. Do extended unemployment benefits lengthen unemployment spells? Evidence from recent cycles in the US labor market. Working paper no. W19048, National Bureau of Economic Research (2013).

[6] See DeLong, J. Bradford, and Lawrence H. Summers. “Fiscal Policy in a Depressed Economy.” Brookings Papers on Economic Activity (2012): 233-297.

[7] Rothstein (2011); Farber and Valletta (2013).

[8] Rothstein, Jesse, and Robert G. Valletta. Scraping by: Income and program participation after the loss of extended unemployment benefits. Federal Reserve Bank of San Francisco working paper no. 2014-6 (2014).

 

“Expanding Economic Opportunity for Women and Families”

Posted on by Ed Paisley

Heather Boushey, Executive Director and Chief Economist, Washington Center for Equitable Growth, testifying before the  U.S. Senate Budget Committee  on “Expanding Economic Opportunity for Women and Families”

Enabling Women to Succeed Builds Strong Families and a Growing Economy

I would like to thank Chairman Murray, Ranking Member Sessions, and the rest of the Committee for inviting me here today to testify.

My name is Heather Boushey and I am Executive Director and Chief Economist of the Washington Center for Equitable Growth. The Center is a new project devoted to understanding what grows our economy, with a particular emphasis on understanding whether and how rising levels of economic inequality affect economic growth and stability.

It is an honor to be invited here today to discuss how working women are critical for economic growth, and how federal policy can further advance women’s economic progress. My testimony today highlights the many aspects of our economy where gender inequality and economic inequality go hand in hand—to the detriment of many families and our nation’s economy—and also where economic inequality among women threatens family well-being and economic growth. Government policies can address these gaps in order to help women succeed, so our economy can succeed.

There are three takeaways from my testimony:

  • Women, their families, and the economy have greatly benefited from women’s entry into the labor force.
  • Yet there are barriers to women’s work that manifest themselves differently across the income distribution, which means that not all women realize their full economic potential.
  • There are a variety of ways that federal policy can encourage women’s labor force participation, among them tax credits and early childhood education programs, which provide critical support for low-income workers and working families. Federal policies such as pay equity and flexible work-family policies can grow our economy by encouraging greater labor force participation among women and increasing women’s contributions to family income.

Women’s employment is critical for families and the economy

Women’s entry into the labor force is one of the most important transformations to our labor force in recent decades. Between 1970 and 2000, the share of women in the labor force steadily increased, from 43.3 percent to 59.9 percent.[i] Today, most women work full time. Before the Great Recession in 2007, the share of women who worked 35 hours or more per week was 75.3 percent.[ii]

Women’s movement into the labor force also transformed how they spend their days, which is increasingly important for families’ economic wellbeing.  About two-thirds of mothers are family breadwinners—those bringing home all of the family’s earnings or at least as much as their partners—or co-breadwinners—those bringing home at least one-quarter of their families’ earnings.[iii] Between 1967 and 2007, the most recent economic peak, the share of mothers who were breadwinners or co-breadwinners rose from 27.7 percent to 62.8 percent, and has increased slightly since then as the economic recession wore on.[iv] (See Figure 1.)

Figure 1. Share of mothers who are breadwinners or co-breadwinners, 1967 to 2010

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Figure source: Sarah Jane Glynn, The New Breadwinners: 2010 Update (Washington, DC: Center for American Progress, 2012).

Women’s increased work is important for family incomes and for economic growth. In a paper we released last month, my colleagues Eileen Appelbaum, John Schmitt and I find that between 1979 and 2012, our nation’s gross domestic product increased by almost 11 percent due to women’s changed employment patterns.[v] This translates to about $1.7 trillion in output in today’s dollars. We find that women’s economic contribution is roughly equivalent to U.S. spending on Social Security, Medicare, and Medicaid in 2012.[vi]

Continuing women’s economic progress

Over the past four decades, women have made great economic gains, but more can be done to help women realize their full economic potential. Gender inequality in the workforce still persists between men and women. Additionally, while some women have made great gains in the workforce, too many women are being left behind.

Between 1960 and 2000, women’s labor force participation steadily grew and the gender pay gap steadily shrank. But progress has stalled for more than a decade. The share of women in the labor force has not significantly increased since 2000, hovering a bit below 60 percent.[vii] Similarly, in 2012 the female-to-male earnings ratio remained at about 77 percent, the same as in 2002.[viii]

To be sure, some women have pulled ahead and experienced increases in incomes despite the recent slow-down in women’s entry in the workforce. But not all women have experienced these gains. Between 2000 and 2007, for example, higher-wage women saw their real wages increase by four times the amount of women with poorly paid jobs.[ix]

One reason is that while some women have made progress entering into professional or male-dominated occupations, many women continue to work in female-dominated occupations that still pay low wages. In 2012, 43.6 percent of women worked in just 20 types of jobs, among them secretary, nurse, teacher, and salesperson. (See Table 1.)

Table 1. Top 20 occupations for women and men, 2012

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Women across the wage distribution need more access to work-family policies in order to better balance the dual demands of work and home. Polices such as paid sick days, paid family leave, and schedule flexibility would fill an important inequality gap for workers, especially women. This basket of work-family policies would allow both women and men to remain in the labor force while dealing with life’s emergencies.

The United States is an outlier among other developed nations in not offering work-family policies to workers.[x] Nor have employers in our country stepped in to provide these benefits. In 2013, only 61 percent of workers had employer-provided paid sick days.[xi] An even smaller share of workers—only 12 percent—had access to employer-provided paid leave, which can be used to recover from an illness or care for a family member.[xii]

Despite playing a larger role as family breadwinners, women today continue to be more likely than men to provide care to their families. The lack of family friendly policies make it harder for women to stay employed and provide financially for their families. Women who have to quit their jobs in order to provide care harm their future earnings potential. The U.S. Census Bureau found that new mothers who have access to paid maternity leave are more likely to return to their previous employer. About 98 percent of those who return to the same employer do so at their previous pay level or higher. Conversely, less than 70 percent of women who change employers after giving birth earn the same level of pay or higher.[xiii]

Work-family policies are critical for the strength and size of our labor force. In a 2013 study by Cornell University economists Francine D. Blau and Lawrence M. Kahn, the authors argue that likely one reason why the United States fell from the sixth-highest female labor-force participation rate among 22 Organisation for Economic Co-operation and Development countries in 1990 to the 17th-highest rate in 2010 was because it failed to keep up with other nations and adopt family-friendly policies.[xiv]

Although most workers do not have access to these important policies, low-wage workers disproportionately lack access to policies to balance work and care. Employers often view policies such as paid leave or paid sick days as perks for higher-paid workers. Too often workers who need these benefits the most—such as low- and middle-wage, young, and less-educated workers—do not have access to them. Workers whose wages are in the lowest 25 percent of average wages are approximately four times less likely to have access to paid family and medical leave than those in the highest 25 percent.[xv]

The lack of benefits for women earning the least in our economy is unhealthy for their families, the labor force, and the economy. Poorly paid jobs that do not provide these work-family benefits often offer nonstandard work or varying schedules, which often result in high employee turnover.[xvi] There is more we can do to boost women’s economic progress, and thereby boost the strength of the entire economy.

Federal policy can help working women succeed

Federal policies can encourage women’s work and increase family income. Specifically, these six policies are tailored to achieve the results we need for our families and our economy:

  • The Earned Income Tax Credit, Child Tax Credit, and Child and Dependent Care Tax Credit
  • The 21st Century Work Tax Act
  • Broader and less expensive access to child care and early childhood education programs
  • Work-family policies, such as family and medical leave insurance, as proposed in the Family and Medical Insurance Leave Act
  • Pay equity
  • Raising the minimum wage

Let’s examine each of these policies briefly in more detail.

Tax credits

With most working women playing the dual roles of breadwinner and caregiver, tax credits can help increase the financial security of American families. The Earned Income Tax Credit is a fully refundable tax credit for low-income working families. The credit is larger for those with dependent children.[xvii] The Earned Income Tax Credit is an effective anti-poverty policy that encourages work, especially among low-income single mothers.[xviii] In 2012, this tax credit lifted 6.5 million people out of poverty, according to the Center on Budget and Policy Priorities.[xix]

Additionally, there are two other tax credits that help most working families—rather than just low-income families—offset the cost of raising children. The Child Tax Credit refunds families up to $1,000 per year, per eligible child.[xx] The Child and Dependent Care Tax Credit refunds families a percentage of total child-care costs, usually 20 percent to 35 percent.[xxi] The percentage of expenses refunded to families decreases as income rises. However, unlike the Earned Income Tax Credit or Child Tax Credit, this tax credit is not refundable, which means that only families who owe income taxes can benefit from the credit.[xxii]

Tax credits can benefit both our current and our future workforce. Tax credits provide families with additional income that can be spent on children’s skill development. For example, economist Gordon B. Dahl at the University of California-San Diego and economist Lance Lochner at the University of Western Ontario find evidence that increases in family income due to the Earned Income Tax Credit increase children’s math and reading test scores.[xxiii]

The 21st Century Worker Tax Act

The 21st Century Worker Tax Cut Act, introduced by Chairman Murray, would help promote women’s economic progress in two ways. First, the act proposes a new tax cut that would let low- and middle-income two-earner families keep more of what they earn. The tax cut would provide a 20 percent deduction on a secondary earner’s income.[xxiv] Furthermore, it would provide an additional benefit to low-income two-earner families. The 20 percent deduction would reduce their earned income for calculating the Earned Income Tax Credit and thus provide a higher refundable benefit.[xxv]

This deduction will benefit working mothers and their families in two ways. By deducting a portion of the secondary earner’s income, the cut would encourage mothers’ workforce participation, thereby helping them to better financially support their families. And it would help low-income working mothers offset the costs of child care through an enhanced refundable Earned Income Tax Credit. This would again further encourage mothers’ workforce participation and boost family income. It is estimated that the tax cut would benefit 7.3 million working families.[xxvi]

Second, the 21st Century Worker Act also would help support childless working women. The Act would increase the Earned Income Tax Credit for childless workers to about $1,400 in 2015.[xxvii] Furthermore, it would increase income eligibility and expand the eligibility age for childless workers so more would be eligible for this tax credit.[xxviii] It is estimated that the Act would benefit 13 million childless workers.[xxix] With women making up nearly two-thirds of minimum wage workers,[xxx] this expansion would increase the financial security of low-income women, and provide them with a better shot at the middle class.

Child care

In order to work and remain in the labor force, mothers need affordable high-quality child care. As mentioned earlier, tax credits help families manage their child care expenses, but child care remains very expensive for most families. In 2011, the average cost for a 4-year old in center-based care ranged from less than $4,000 a year to more than $15,000 a year.[xxxi] With most working women earning less than $30,000 a year, many cannot afford care or spend a large portion of their earnings on care.[xxxii]

In addition to making child care less expensive, policy should address so called “child care cliffs” for families receiving child-care assistance. In certain states, a slight increase in parent’s earnings can push them over the income threshold for child-care assistance, which can result in a sharp increase in child care expenses.[xxxiii] Unable to pay for high-quality care, working mothers could turn down a raise or ask for a pay cut to avoid going over the “cliff.”[xxxiv]

Early childhood education is one of the most important investments in our future workforce. But not all child care meets the standards to be considered an early childhood education program. It is important that policies expand access to high-quality early childhood education programs, especially to low-income children. Research finds that children who participate in early childhood education programs are more likely to do better in school, graduate and attend college, and are less likely to get involved with crime and become teenage parents.[xxxv] There are also large benefits to society. An academic study found that for every $1 invested in high-quality preschool, the U.S. economy saves $7 in future public costs due to increases in workers’ productivity, reduced remedial education costs, and reduced crime.[xxxvi]

Head Start

The Bipartisan Budget Act of 2013, also known as the Murray-Ryan Budget Agreement, made important steps toward expanding early childhood education programs to working families. The Act provided about $8.6 billion in Head Start funding and for the President’s Early Head Start-Child Care Partnerships. This amount reversed the entire sequester cut to Head Start, about a half billion more than 2013 funding.[xxxvii] In fiscal year 2014, more low-income families can utilize this comprehensive early childhood program. About 57,000 children were dropped from the program in 2013.[xxxviii]

Family and Medical Leave Insurance

Women need polices to help them balance work and family care so they can remain in the workforce and help grow our economy. Family and medical leave insurance—also known as paid leave—would provide a critical support for workers—men and women alike—allowing them to take temporary leave from work to recover form an illness or care for a loved one.

The Family and Medical Insurance Leave Act of 2013, also known as the FAMILY Act, would relieve the financial burden of taking unpaid time off, providing paid leave for nearly every U.S. worker.[xxxix] Introduced by Representative Rosa DeLauro and Senator Kirsten Gillibrand, the FAMILY Act draws on what we have learned from states that have family leave insurance and from other federal benefit programs.

Today, only three states provide paid leave to their workers: California, New Jersey, and Rhode Island.[xl] These three states provide years of useful experience to other states interested in providing paid leave to their workers. To encourage states to offer paid leave programs, the President’s Fiscal Year 2015 budget requests a $5 million State Paid Leave Fund.[xli]

Paid leave makes it easier for women to work and have higher lifetime earnings. Research by economist Christopher J. Ruhm at the University of Virginia and researcher Jackqueline L. Teague find that paid parental leave policies are associated with higher employment-to-population ratios and decreased unemployment for all workers.[xlii] Ruhm and Teague also find that moderate leaves—10 weeks to 25 weeks—are associated with higher labor-force participation rates for women.[xliii]

By remaining in the labor force, women are able to earn more during their careers, increasing families’ financial security.[xliv] Furthermore, there is evidence that these work-family policies could also help close the wage gap between workers who provide care and those who do not.[xlv]

Pay equity

The pay gap today persists for all women. On average, working women only make 77 cents for every dollar earned by men.[xlvi] This gap means that women make $11,084 less than men per year in median earnings.[xlvii] If women were paid the same amount as their male counterparts, their additional earnings could help improve their families’ financial security as well as provide additional tax revenue to the government.

Making sure that women receive equal pay for equal work not only affects their lifetime earnings but also strengthens the economy. The Institute for Women’s Policy Research finds that if women had received pay equal to their male counterparts in 2012, the U.S. economy would have produced $447.6 billion in additional income.[xlviii] This is equal to 2.9 percent of 2012 gross domestic product, or about equal to the entire economy of the state of Virginia.[xlix]

The President’s Fiscal Year 2015 budget requests $1.1 million to help eliminate pay discrimination among federal contractors. The funds would be used by the Office of Federal Contract Compliance Programs to strengthen enforcement efforts.[l]

Minimum wage

Raising the minimum wage is critical for closing the wage gap. Low-wage workers are disproportionately women. Nearly two-thirds of minimum wage workers are women.[li]

Raising the minimum wage would provide many women—who represent 49.2 percent of total U.S. employment[lii]—with the economic security they need to succeed. According to calculations from the Economic Policy Institute, approximately 28 million workers would see a raise if the minimum wage were raised to $10.10 by July 2016.[liii] Fifty-five percent of the affected workers would be women. This share varies by state, and is as high as 63.3 percent in Mississippi.[liv]

Conclusion

Women’s employment is critical to their families and to our nation’s economy. Federal policy can do more to help women realize their full economic potential no matter where they are on the income ladder.

The Murray-Ryan Budget agreement has helped promote women’s economic progress in the workforce, but there will be more work to do after the deal expires.

We need to preserve tax credits such as the Earned Income Tax Credit and funding for early childhood education programs such as Head Start. Women are more likely to be low-wage workers, which means they and their families are more vulnerable to spending cuts. Passing the 21st Century Worker Tax Cut Act would provide two critical tax credits to low-wage working women, helping increase their earnings and give them a better shot at entering the middle class.

In addition, ensuring pay equity and providing work-family supports such as the FAMILY Act to all working women will further their economic progress. Closing the wage gap and raising the minimum wage boosts women’s earnings and could generate additional tax revenue. Work-family policies help breadwinner mothers remain in the labor force and better financially provide for their families.

As a critical driver of economic growth, women need polices that expand workforce opportunities. Yet to help all women succeed, polices must acknowledge that barriers to women’s work manifest themselves differently across the income distribution.  To echo House Minority Leader Nancy Pelosi, “when [all] women succeed, America succeeds.”[lv]

Endnotes

[i]           U.S. Bureau of Labor Statistics, Women in the Labor Force: A Databook (Washington, DC: U.S. Department of Labor, 2013), Table 2.

[ii]          U.S. Bureau of Labor Statistics, Women in the Labor Force: A Databook, Table 20.

[iii]         Heather Boushey, “The New Breadwinners,” in The Shriver Report: A Woman’s Nation Changes Everything, ed. Heather Boushey and Ann O’Leary (Washington, DC: Center for American Progress, 2009); Sarah Jane Glynn, The New Breadwinners: 2010 Update (Washington, DC: Center for American Progress, 2012).

[iv]         Sarah Jane Glynn, “The New Breadwinners: 2010 Update.”

[v]          Eileen Appelbaum, Heather Boushey, and John Schmitt, Economic Importance of Women’s Rising Hours of Work: Time to Update Employment Standards (Washington, DC: Center for American Progress and the Center for Economic and Policy Research, 2014).

[vi]         Ibid.

[vii]        U.S. Bureau of Labor Statistics, Women in the Labor Force: A Databook, Table 2.

[viii]       Carmen DeNavas-Walt, Bernadette D. Proctor, and Jessica C. Smith, Income, Poverty, and Health Insurance Coverage in the United States: 2012 (Washington, DC: U.S. Census Bureau, 2013), Table A-4.

[ix]         The statistic refers to the 90th to 10th wage percentile ratio. Lawrence Mishel and others, State of Working America, 12th ed. (Washington, DC: Economic Policy Institute, 2013), Table 4-6, http://stateofworkingamerica.org/chart/swa-wages-table-4-6-hourly-wages-women-wage/.

[x]          Jody Heymann, Alison Earle, and Jeffrey Hayes, The Work, Family, Equity Index: How Does the U.S. Measure Up? (Montreal, Canada: Institute for Health and Social Policy, McGill University, 2009), http://www.hreonline.com/pdfs/08012009Extra_McGillSurvey.pdf.

[xi]         U.S. Bureau of Labor Statistics, “Table 32. Leave Benefits: Access, Private Industry Workers, National Compensation Survey, March 2013” (U.S. Department of Labor, 2013), http://www.bls.gov/ncs/ebs/benefits/2013/ownership/private/table21a.pdf.

[xii]        U.S. Bureau of Labor Statistics, “Table 32. Leave Benefits: Access, Private Industry Workers, National Compensation Survey, March 2013.”

[xiii]       Lynda Laughlin, Maternity Leave and Employment Patterns of First-Time Mothers: 1961–2008 (Washington, DC: U.S. Bureau of the Census, 2011), Table 11, http://www.census.gov/prod/2011pubs/p70-128.pdf.

[xiv]        Francine D. Blau and Lawrence M. Kahn, Female Labor Supply: Why Is the US Falling Behind? (Bonn, Germany: Institute for the Study of Labor, 2013).

[xv]         U.S. Bureau of Labor Statistics, “Table 32. Leave Benefits: Access, Private Industry Workers, National Compensation Survey, March 2013.”

[xvi]        Susan J. Lambert and Julia R. Henly, “Nonstandard Work and Child-care Needs of Low-income Parents.” In Suzanne M. Bianchi, Lynne M. Casper, and Rosalind B. King, eds., Work, Family, Health, and Well-being (Lawrence Erlbaum Associates, Inc., 2005), pp. 473–92.

[xvii]       Elaine Maag and Adam Carasso, “Taxation and the Family: What Is the Earned Income Tax Credit?” (Washington, DC: Tax Policy Center, 2014), http://www.taxpolicycenter.org/briefing-book/key-elements/family/eitc.cfm.

[xviii]      Nada Eissa and Jeffrey B. Liebman, “Labor Supply Response to the Earned Income Tax Credit,” The Quarterly Journal of Economics 111, no. 2 (1996): 605–37; Chuck Marr, Chye-Ching Huang, and Arloc Sherman, Earned Income Tax Credit Promotes Work, Encourages Children’s Success at School, Research Finds (Washington, DC: Center on Budget and Policy Priorities, 2014), http://www.cbpp.org/files/6-26-12tax.pdf.

[xix]        Center on Budget and Policy Priorities, The Earned Income Tax Credit (Washington, DC: Center on Budget and Policy Priorities, 2014), http://www.cbpp.org/files/policybasics-eitc.pdf.

[xx]         Center on Budget and Policy Priorities, Policy Basics: The Child Tax Credit (Washington, DC: Center on Budget and Policy Priorities, 2014), http://www.cbpp.org/files/policybasics-ctc.pdf.

[xxi]        Elaine Maag, “The Tax Policy Briefing Book: Taxation and the Family: How Does the Tax System Subsidize Child Care Expenses?” (Washington, DC: Tax Policy Center, 2013), http://www.taxpolicycenter.org/briefing-book/key-elements/family/child-care-subsidies.cfm.

[xxii]       Maag, “The Tax Policy Briefing Book: Taxation and the Family: How Does the Tax System Subsidize Child Care Expenses?”

[xxiii]      Gordon B. Dahl and Lance J. Lochner, “The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit,” American Economic Review 102, no. 5 (August 2012): 1927–56.

[xxiv]      21st Century Worker Tax Cut Act, S. 2162, 113 Cong. 2 sess. (2014).

[xxv]       U.S. Senator Patty Murray, “Senator Patty Murray Introduces The 21st Century Worker Tax Cut Act,” Press release, March 26, 2014, http://www.murray.senate.gov/public/index.cfm/2014/3/senator-patty-murray-introduces-the-21st-century-worker-tax-cut-act.

[xxvii]     U.S. Senator Patty Murray, “Senator Patty Murray Introduces The 21st Century Worker Tax Cut Act.”

[xxviii]    Ibid.

[xxix]      U.S. Senate Budget Committee, “The 21st Century Worker Tax Act.”

[xxx]       David Madland and Keith Miller, “Raising the Minimum Wage Would Boost the Incomes of Millions of Women and Their Families” (Center for American Progress Action Fund, 2013), http://www.americanprogressaction.org/issues/labor/news/2013/12/09/80484/raising-the-minimum-wage-would-boost-the-incomes-of-millions-of-women-and-their-families/.

[xxxi]      Melissa Boteach and Shawn Fremstad, “Putting Women at the Center of Policymaking,” in The Shriver Report: A Woman’s Nation Pushes Back from the Brink (Washington, DC: Center for American Progress, 2014), 244–79.

[xxxii]     Ibid.

[xxxiii]    Ibid.

[xxxiv]      Ibid; NBC News, “Working Americans turn down pay raise to avoid ‘cliff effect’,” May 24, 2013, http://www.nbcnews.com/video/rock-center/51996100.

[xxxv]     James J. Heckman and Dimitriy V. Masterov, “The Productivity Argument for Investing in Young Children,” Review of Agricultural Economics 29 (2007): 446–93.

[xxxvi]    Arthur J. Reynolds et al., “Age 21 Cost-Benefit Analysis of the Title I Chicago Child-Parent Centers,” Educational Evaluation and Policy Analysis 24, no. 4 (Winter 2002): 267–303.

[xxxvii]   Committee on Appropriations – Democrats, “Summary of Omnibus Appropriations Act,” United States House of Representatives, http://democrats.appropriations.house.gov/top-news/summary-of-omnibus-appropriations-act/ (last accessed May 2014); Harry Stein, “The Omnibus Spending Bill Reveals the Economic Consequences of the Murray-Ryan Budget Deal” (Center for American Progress, 2014), http://www.americanprogress.org/issues/budget/news/2014/01/17/82484/the-omnibus-spending-bill-reveals-the-economic-consequences-of-the-murray-ryan-budget-deal/.

[xxxviii]  Stein, “The Omnibus Spending Bill Reveals the Economic Consequences of the Murray-Ryan Budget Deal.”

[xxxix]    National Partnership for Women and Families, “Fact Sheet: The Family and Medical Insurance Leave Act (FAMILY Act)” (Washington, DC: National Partnership for Women & Families, 2014), http://www.nationalpartnership.org/research-library/work-family/paid-leave/family-act-fact-sheet.pdf.

[xl]         National Partnership for Women and Families, “Paid Family & Medical Leave: An Overview,” (2012), http://go.nationalpartnership.org/site/DocServer/PFML_Overview_FINAL.pdf?docID=7847; Rhode Island Department of Labor and Training, “Temporary Disability Insurance,” http://www.dlt.ri.gov/tdi/ (last accessed May 2014).

[xli]        Department of Labor, FY 2015 Department of Labor Budget in Brief (Washington, DC: Department of Labor, 2014), http://www.dol.gov/dol/budget/2015/PDF/FY2015BIB.pdf.

[xlii]       Christopher Ruhm and Jackqueline L. Teague, “Parental Leave Policies in Europe and North America,” Gender and the Family Issues in the Workplace, 1997, 133–56.

[xliii]      Ibid.

[xliv]       MetLife Mature Market Institute, The MetLife Study of Caregiving Costs to Working Caregivers: Double Jeopardy for Baby Boomers Caring for Their Parents (Westport, CT: MetLife Mature Market Institute, 2011).

[xlv]        Jane Waldfogel, “The Family Gap for Young Women in the United States and Britain: Can Maternity Leave Make a Difference?,” Journal of Labor Economics 16, no. 3 (1998): 505–45.

[xlvi]       DeNavas-Walt, Proctor, and Smith, Income, Poverty, and Health Insurance Coverage in the United States: 2012, Table A-4.

[xlvii]      National Women’s Law Center, “How the Wage Gap Hurts Women and Families,” (Washington, DC: National Women’s Law Center, 2013), http://www.nwlc.org/sites/default/files/pdfs/factorotherthan_sexfactsheet_5.30.12_final.pdf.

[xlviii]     Heidi Hartmann and Jeffrey Hayes, How Equal Pay for Working Women Would Reduce Poverty and Grow the American Economy (Washington, DC: Institute for Women’s Policy Research, 2014).

[xlix]       Ibid; U.S. Bureau of Economic Analysis, Widespread Economic Growth in 2012, News release, June 6, 2013), Table 4, http://bea.gov/newsreleases/regional/gdp_state/2013/pdf/gsp0613.pdf.

[l]           Department of Labor, FY 2015 Department of Labor Budget in Brief.

[li]          Madland and Miller, “Raising the Minimum Wage Would Boost the Incomes of Millions of Women and Their Families.”

[lii]         David Cooper, Raising the Federal Minimum Wage to $10.10 Would Lift Wages for Million and Provide a Modest Economic Boost, (Washington, DC: Economic Policy Institute, 2013), http://www.epi.org/publication/raising-federal-minimum-wage-to-1010/.

[liii]        Ibid.

[liv]        Ibid.

[lv]         Democratic Leader Nancy Pelosi, “When Women Succeed, America Succeeds: An Economic Agenda for Women and Families,” http://www.democraticleader.gov/Women_Succeed (last accessed May 2014).

A Video of an Event with Thomas Piketty, Author of “Capital in the 21st Century””

Posted on by Ed Paisley

A video of the April 15, 2014 event featuring French economist Thomas Piketty discussing his new book, “Capital in the 21st Century.” The event, co-hosted by the Economic Policy Institute, is followed by a discussion moderated by Heather Boushey, Executive Director and Chief Economist of the Washington Center for Equitable Growth, with Josh Bivens, Research and Policy Director of the Economic Policy Institute, Robert M. Solow, Professor Emeritus at the Massachusetts Institute of Technology, and Betsey Stevenson, Member of the White House Council of Economic Advisers, serving as discussants:

John Podesta: Income inequality’s ripple effect

Posted on by Heather Boushey

John D. Podesta, discussing the launch of the Washington Center for Equitable Growth and whether and how economic inequality and economic growth are linked.)

Last week, Barack Obama, delivering the clearest and most powerful economic policy speech of his presidency at an event sponsored by the Center for American Progress, identified “the combined trends of increased inequality and decreasing mobility” as “the defining challenge of our time.” The week before, in his first papal exhortation, Pope Francis robustly criticized “trickle-down theories” of economic growth as having “never been confirmed by the facts” and as leaving behind the poor and vulnerable. Soon after being awarded the Nobel Prize in Economics, Robert Shiller told the Associated Press that inequality was “the most important problem that we are facing now today.”

This article originally appeared in Politico Magazine on December 9, 2013.

These concerns are serious. For the last three decades, the U.S. economy has been growing dramatically more unequal and less mobile by nearly every measure. The fact is that we don’t know nearly enough about what high inequality means for economic growth and stability. We need a better understanding of how inequality affects demand for goods and services and macroeconomic and financial imbalances. We are in the dark on whether and how inequality affects entrepreneurship, or whether it alters the effectiveness of our economic and political institutions, or how it affects individuals’ ability to access education and productively employ their skills and talents.

That’s why we’ve established the new Washington Center for Equitable Growth, a long-term effort to support serious, sustained inquiry into structural challenges facing our economy. Our aim is to enable rigorous research on the relationship between inequality and growth through a competitive, peer-reviewed, academic grant program; to elevate the work of young scholars and new voices; and to help make sure cutting-edge research is relevant and informative to policymaking debates.

The basic facts bear repeating. Income inequality in the United States today has reached levels last seen during the Roaring ’20s. Over the last three decades, the top 1 percent of incomes have risen by 279 percent, while the bottom fifth of workers have seen an increase of less than 20 percent. In 1979, the middle 60 percent of households took home 50 percent of U.S. income. By 2007, their share was just 43 percent.

These trends have continued since the end of the Great Recession. Ninety-five percent of income gains since 2009 have gone to the top 1 percent of earners. In 2012, the top 10 percent took home more than 50 percent of the nation’s income—a record high. After a brief period in the late 1990s during which incomes rose across the board, median wages stagnated during the 2000s, and have remained depressed during the economic recovery.

These trends are aided and abetted by a dominant narrative defining how the economy grows. According to conventional wisdom, inequality may upset or offend us, but it’s a necessary part of a competitive economy. Economic growth is driven by the wealthy few, who make investments, build businesses, and create jobs—ideally, according to some, in an atmosphere of small government, low taxes and limited regulation. Policy interventions to reduce inequality or support lower and middle-class Americans are assumed to hurt job creation or harm growth.

“Over the years, as I’ve looked for the evidence behind this story, I’ve found it to be flimsy,” Nobel Prize laureate Robert Solow says in a video that premiered last month at WCEG’s launch. “Sometimes there’s not much evidence there at all.”

This tough-love, winner-take-all narrative dominating policymaking is far too limited a way to think about how a complex, modern, diverse economy like ours expands and thrives. The strongest periods of economic growth in the 20th century were also times when incomes rose across the board.

With the guidance of distinguished academic economists and thinkers from around the country, WCEG will start by asking questions about the relationship between inequality and economic growth—questions for which we don’t purport to have the answers.

But we know asking the questions is important, because inequality matters to Americans. About half of public school students in the South and West today live near, at or below the poverty line. At the same time, the educational achievement gap between low- and high-income students has increased by about 40 percent since the 1960s, even as the black-white achievement gap has shrunk.

And while life expectancy has continued to increase, albeit at different rates, for most demographic groups, it has declined by 5 years for white women who do not have their high-school diploma. It’s an unprecedented drop for a prosperous, modern, industrialized economy, and researchers can only speculate on why it is happening.

We need to understand what the impact of these and other trends will be on our economy in the long term, and how policymakers should respond now. Over the course of the 20th century, many countries produced great wealth, but no combination of economic and political systems has resulted in shared prosperity or economic dynamism to rival the United States. As we move forward into the 21st century, understanding how to sustain that prosperity and dynamism is in the interest of us all. A clearer understanding of how today’s levels of inequality affect growth and stability—and how to best promote a more equitable economy—is a critical place to start.

John Podesta’s Remarks at the Launch of Equitable Growth

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John Podesta delivered opening remarks at the launch event for the Washington Center for Equitable Growth on November 15, 2013.

Good morning. Thank you all for joining us as we launch the Washington Center for Equitable Growth. And thank you, Heather, for your kind words and your hard work to make Equitable Growth a reality.

We would not be here today if not for the efforts of many passionate, intelligent people. Before I begin, a few thank-yous are in order:

The members of our steering committee for their time and energy; led by our intellectual godfather and inspiration for this project, Bob Solow;

The talented academics and researchers who have joined our Research Advisory Board, whose help and expertise we will call on often in the months and years to come;

And, of course, all of our distinguished panelists, some of whom have traveled a long way to be with us today. Thank you for being here.

I also want to make a special thank you to my friend Herb Sandler and the foundation he and his late wife, the wonderful Marion, founded, for their leadership and support.

I also want to acknowledge and thank Neera Tanden, the President of the Center for American Progress, for supporting and housing Equitable Growth at the Center for American Progress and for sustaining an environment of open inquiry and a constant search for deeper understanding about how our economy works.

It’s wonderful to be in this historic synagogue, this beautiful old building which has been a cornerstone of the District of Columbia’s civic and community life for more than a hundred years.

I trust it won’t come as a shock to anyone in this room when I say we live in a country where incomes have been increasingly unequal since 1979. Today, our income distribution more closely resembles that of El Salvador than Canada.

Over the last three decades, the top 1 percent of earners have seen their incomes increase by 279 percent. But the incomes of the bottom fifth of workers have risen by less than 20 percent.

Since the end of the Great Recession, the top of 1 percent of earners have captured 95 percent of income gains. Last year, the top 10 percent of earners took home more than half of the country’s total income.

Income inequality in the United States today has reached levels not seen since the Roaring ’20s.

These trends aren’t abstractions. They have real and serious consequences for the American people. The unemployment rate at the bottom of the income scale is above 20 percent, while unemployment among the richest Americans stands at just 3.2 percent. That’s not abstract. Last year, one in five children under 18 lived in poverty, the highest rate since the early 90s. All the gains we made in the fight against poverty during the Clinton administration have been washed away. That’s not abstract.

The conventional wisdom says that inequality, even dramatic inequality like we have today, is an inevitable byproduct of a competitive market economy.  For many years, certainly among conservatives but also among some progressives, the notion that policy interventions that dampen inequality would also hurt growth has not been adequately challenged.

For some, these assumptions go further: that the ingenuity of the American people can flourish only in an atmosphere of small government, limited regulation, and low taxes on the rich. Growth comes from high-income investors, the so-called “job creators.” Inequality may be unfortunate—it may insult our sense of fairness—but tolerating it is necessary if we want strong economic growth. Or so we often hear. Despite the lack of evidence that it’s true.

We think that is far too narrow a way to understand how an economy like ours actually grows and thrives. Today, the U.S. has rates of inequality comparable to developing countries, despite having a far more complex economy—but we’re largely in the dark about the implications of that fact.

Recent research in the international context suggests that more equal societies generally experience longer periods of economic growth. Other studies point to the importance of issues ranging from investing in human capital to encouraging political inclusion as ways to support long-term economic growth and stability.

But evidence remains thin on how worsening inequality affects these economic components: how it may alter demand for goods and services, or hinder entrepreneurialism, or undermine our political or economic systems.

We are launching the Washington Center for Equitable Growth to help accelerate new, cutting-edge research into how these deep structural changes affect growth and stability. We want to facilitate a deeper dive, through a competitive, peer-reviewed grant program, into understanding the mechanisms through which inequality affects growth. We want to help make important new research on economic growth and stability relevant to policymaking. We want to help support and elevate excellent work from talented younger scholars, a number of whom are joining us here this morning. And we want to shift the debate away from polemics and back towards a substantive, evidence-backed conversation here in Washington.

Ten years ago, I worked with Neera, Sarah Wartell, and a small group of people to start the Center for American Progress. We wanted to build an institution where progressive leaders could hone their policy ideas and collaborate across a range of critical issues, from national security to clean energy to education. I’m tremendously proud of what we have achieved, and I know CAP will continue to be a leader in Washington for decades to come.

But I’ve always thought that academic research is an underutilized resource in the policy debate. Too often, rigorous research and analysis, even when it concerns our most critical social and economic issues, doesn’t make its way from the academy to the shores of the Potomac, where policymaking by anecdote or instinct too often takes precedence. But when academic economists tell us that they don’t have clear evidence yet, it’s hard for policymakers to know the best road forward. Even where we do have answers, it can be difficult for academic research to have an impact on the policy debate given the separation between these two communities.

So we’re fortunate to be guided by a truly outstanding group of academics with interest or expertise in policy. Throughout our planning, we’ve engaged with three generations of leading economic thinkers: one represented by Bob Solow; the second by Laura Tyson and Alan Blinder; and the third by Raj Chetty, Emmanuel Saez, Melody Barnes, and Brad DeLong.

Today, we’ll hear from some of these leading scholars, who are really well-positioned to dive into the questions, and from some of those policymakers, who are demanding a more rigorous evidence-based point of departure for the policy battles that lie ahead.  What you will hear today are the kinds of interesting and insightful conversations on which we believe the debate on inequality and growth must be based.

Now, it gives me great pleasure to introduce a true lion of the economics profession, Professor Robert Solow, who I know wishes he could be here with us in person today, but who’s such an inspiration to this effort we went to him to get his thoughts on the matter.

It would be hard to say that better or more succinctly. Today would not be possible without the support and expertise of dozens of passionate, dedicated people. There are representatives from many organizations and foundations here today who have been leaders in supporting important research and casting a critical eye on unanswered economic questions.

One of those people is Rob Johnson, the president of the Institute for New Economic Thinking. We’re thrilled to have Rob here with us today to say a few words. Under Rob’s extraordinary leadership, INET has sponsored some truly cutting-edge, exciting research on the economic challenges of the future. We’re looking forward to a long and fruitful partnership with Rob and with INET.

Please join me in welcoming Rob Johnson.