Should-Read: The eminent and brilliant Mary Daly is one of the people on the shortest of my short lists of people who would be a good next president of the Federal Reserve Bank of San Francisco. Here she is talking in Phoenix, AZ: Mary Daly: Raising the Speed Limit on Future Growth: “Why aren’t American workers working?…

Some of the drop owes to wealthier families choosing to have only one person engaging in the paid labor market (Hall and Petrosky-Nadeau 2016). And I emphasize paid here…. Some of the lost labor market participation seems related to having the financial ability to make work–life balance choices. Another factor… is ongoing job polarization that favors workers at the high and low ends of the skill distribution…. Our economy is automating thousands of jobs in the middle-skill range, from call center workers, to paralegals, to grocery checkers…. These pressures on middle-skilled jobs leave a big swath of workers on the sidelines, wanting work but not having the skills….

The final and perhaps most critical issue…. We’re not adequately preparing a large fraction of our young people for the jobs of the future…. By 2020, for the first time in our history, more jobs will require a bachelor’s degree than a high school diploma (Carnevale, Smith, and Strohl 2013)…. In 2016 only 37% of 25- to 29-year-olds had a college diploma (Snyder, de Brey, and Dillow 2018)…. So where should we focus our efforts when it comes to getting more young people into college? One place to start is in working to equalize educational attainment across students of different races and ethnicities…. Given the important role that education plays… equalizing… educational attainment across these groups has big benefits….

The really good news is that education is generally a win–win, beneficial to individuals and to taxpayers. We know that those with a college degree are much more likely to become top earners during their career, regardless of their financial background (Daly 2012; Daly and Bengali 2013, 2014; and Daly and Cao 2015). They have lower unemployment rates, and they’re less likely to become unemployed during a recession. And while there’s no doubt the cost of college is a strain for many, the average time it takes to recoup that cost is 10 years (Abel and Deitz 2014). This means that, relative to many other investments, education pencils out, even if graduates don’t go on to earn top salaries. For taxpayers the math is even more straightforward. A detailed study by the OECD shows that college is a great investment for taxpayers (OECD 2017). The costs paid to educate are more than covered by increased productivity, longer and more stable work lives, and higher tax revenues from graduates…. Education is incentive compatible, good for everyone involved…

April 5, 2018


Brad DeLong
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