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Report
Land of opportunity? Economic mobility in the United States. 2012 annual report of the Federal Reserve Bank of Richmond
Economics writer Jessie Romero and group vice president Kartik Athreya interpret data that suggest economic mobility has decreased in recent years. Many factors contribute to mobility, but for most people advancement depends on opportunities to obtain human capital ? opportunities that are not as good for children in poor families. Initiatives that focus on early childhood education seem to yield high returns on investment. Their feasibility on a large scale is unknown, but they may have the potential to help the United States achieve a more inclusive prosperity.
Report
Falling Short: Why Isn't the U.S. Producing More College graduates?
Why is the United States not producing more college graduates, especially in light of the large and persistent wage gap between workers who graduate from college and those who do not? Senior policy economist Urvi Neelakantan and economics writer Jessie Romero consider several factors that may help answer the question, including inadequate preparation during students' K-12 years. They discuss how K-12 preparation varies with socioeconomic status and how "school-choice" initiatives are intended to give more children access to high-quality schools.
Briefing
Microenterprise and the small-dollar loan market
"Small business" is a designation that includes businesses of many different sizes with varying financial needs and access to credit. Microenterprises ? businesses with fewer than five employees ? are served primarily by the small-dollar loan market, which ranges from payday lending to microloans offered by nonprofit organizations and, to a lesser extent, loans from traditional financial institutions. This Economic Brief explores the need for and challenges facing the small-dollar loan market in the United States.
Briefing
How Risky Are Young Borrowers?
Young borrowers are conventionally considered the most prone to making financial mistakes. This has spurred efforts to limit their access to credit, particularly via credit cards. Recent research suggests, however, that young borrowers are actually among the least likely to experience a serious credit card default. One reason why people obtain credit cards early in life may be to build a strong credit history.
Briefing
The Role of Option Value in College Decisions
Despite the large and persistent wage premium earned by college graduates, college enrollment and graduation rates remain relatively low, particularly for students from lower-income families. Economic models that highlight the role of risk and option value in higher education decisions can help explain these trends.
Briefing
Expanding the Scope of Workforce Development
Workforce development efforts often are geared toward adult workers. But examining workforce development from the perspective of human capital theory suggests that earlier interventions may yield high returns.
Briefing
Land of Opportunity? Economic Mobility in the United States
Income inequality has increased in recent years, while economic mobility has decreased. Many factors contribute to mobility, but for most people advancement depends on opportunities to obtain human capital ? opportunities that are not as good for children in poor families. Initiatives that focus on early childhood education seem to yield high returns on investment and potentially could help the United States achieve a more inclusive prosperity.
Briefing
Transitioning from High School to College: Differences across Virginia
In Virginia, there are substantial differences across school districts in college enrollment and, conditional on college enrollment, attendance at high-resource colleges and universities. School districts in low-income and relatively rural areas tend to demonstrate the weakest outcomes, but income and geography do not fully account for the observed differences. Whether limited enrollment at a broad range of colleges arises from gaps in academic preparation, difficulty in navigating the application process, or individual preference matters greatly for public policy.
Briefing
Slowing Growth in Educational Attainment
Research suggests the economy's demand for college-educated workers exceeds the supply, which might be contributing to slower economic growth. Improving students' preparation at the K-12 level could both increase the college completion rate and help those who are not college-bound choose the best paths for themselves.
Briefing
Monetary policy with unknown natural rates
The "unemployment gap" is an important factor in monetary policy decisions. But the size of the gap depends on the level of natural rate of unemployment, which is inherently unobservable. The uncertainty surrounding estimates of the natural rate, and the costs of mismeasuring it, may recommend a policy rule that responds to the rate of change in the actual unemployment rate rather than to the implied unemployment gap.