Equitable Growth releases 2019 Request for Proposals
The Washington Center for Equitable Growth is mission-driven to advance evidence-based ideas and policies that promote strong, stable, and broad-based economic growth. One of the core ways we further that mission is through our academic grants program, which supports cutting-edge scholarly research investigating the various channels through which economic inequality may or may not impact economic growth and stability. On Monday, November 5, 2018, Equitable Growth issued its 2019 Request for Proposals and is inviting researchers at U.S. universities—both faculty members and Ph.D. candidates—to explore the questions we are hoping to answer and consider applying for a research grant.
Founded in 2013, Equitable Growth has awarded roughly $4 million to more than 150 researchers over 5 years of grantmaking. Findings from funded research, as well as that of our in-house experts, Steering Committee members, and Research Advisory Board, have informed policy debates on a wide range of topics at all levels of government, from legislative proposals for fair work scheduling to the importance of the minimum wage for broad-based economic growth.
Our grantmaking is organized around key drivers of economic growth, allowing us to ask questions to better understand the mechanisms through which inequality may be affecting growth. After 5 years of funding research, we have, for the first time, altered how we organize our grantmaking. While the underlying questions have not changed, the reorganization captures what we’ve learned about what makes the U.S. economy grow. The updated funding channels are: macroeconomic policy, market structure, the labor market, and human capital.
While not drastically different from our previous funding channels, this new organization reflects important findings from recent research. One case in point: A growing body of research into the relationship between inequality and economic mobility highlights the notable variations in economic outcomes across place and by race. These findings, among others, led us to refine our focus on human capital to better understand how economic inequality might be impeding the acquisition and cultivation of human capital. This and similar research also leads us in our new round of grantgiving to ask about the effectiveness of people-based versus place-based policies to counteract the dynamics of inequality.
Other research funded by Equitable Growth focused on a similarly disturbing trend—despite dropping interest rates, the return to capital has remained steady, and firms are reaping record profits, yet they are not investing in their operations or workforces. Instead, the share of income going to labor has declined while the share going to capital has increased. The authors conclude that these trends can be explained by a sizable increase in monopoly power. This and other studies lead Equitable Growth to focus on market structure as a key mechanism through which inequality may be affecting economic growth.
Similarly, the labor market is one of the most important institutions determining economic growth, particularly its distribution, as labor income is more than two-thirds of national income. Skill levels and the efficient matching of skills to jobs are key for economic growth. Yet the labor market is not a perfectly competitive market, but rather one that is regulated by a wide array of institutions that affect labor income and its distribution. A wealth of research on stagnating wages, pay inequality, and other issues facing workers led Equitable Growth to place a heavier emphasis on the two-way link between equitable growth and the labor market.
Finally, there is increasing political unrest in the United States. Democratic institutions are fundamental to the stability and smooth functioning of the U.S. economy. To help us understand what role inequality may play in levels of trust in government, its institutions, and the ability of elected officials to make policies to ensure strong, stable, and broadly shared growth, Equitable Growth has included questions related to political economy within its macroeconomic policy funding channel.
After 5 years of grantmaking, we have learned a lot, but we still have a lot to learn. We encourage you to read our 2019 Request for Proposals—an open solicitation to researchers at U.S. universities to apply for funding for new, cutting—edge research on inequality and growth—and to explore our funded research.