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...

Macroeconomic models often make simplifying assumptions that suppress differences between people. Changing these assumptions and allowing for "heterogeneity" can enrich analysis of both observed data and policy tradeoffs. Modern macroeconomics has made significant progress in this area,...

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...

Despite a large and growing earnings premium for college graduates, growth in college enrollment and especially college attainment in the United States has been quite slow. The labor market's apparent lack of responsiveness to the earnings premium may be driven in part by the risks that...

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.

It is widely believed that public sector spending and investment can restore aggregate economic activity to efficient levels. But some policy responses are likely to be more successful than others. In particular, directly targeting frictions in capital, labor, and insurance markets arguably...

There has been a longstanding debate in the United States about how to assist low-income families. The Earned Income Tax Credit (EITC) is designed to augment income while encouraging work: The tax credit increases with earnings for low levels of household income, but declines and ultimately is...