Search Results
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.
Working Paper
Who Values Access to College?
A first glance at US data suggests that college -- given its mean returns and sharply subsidized cost for all enrollees -- could be of great value to most. Using an empirically-disciplined human capital model that allows for variation in college readiness, we show otherwise. While the top decile of valuations is indeed large (40 percent of consumption), nearly half of high school completers place zero value on access to college. Subsidies to college currently flow to those already best positioned to succeed and least sensitive to them. Even modestly targeted alternatives may therefore improve ...
Discussion Paper
College or the Stock Market, or College and the Stock Market?
In this note, we document facts about the relationship between stock market participation and a predominant form of human capital investment -- formal higher education. We examine, using the Survey of Consumer Finances (SCF), the relationship between stock market participation and college enrollment and completion, with attention to the presence or absence of student loan debt.
Briefing
The Living Arrangements of Older Households
n the past century, the share of the U.S. population aged 65 or older has more than tripled, rising from 4.7 percent in 1920 to 16.8 percent in 2020.1 This trend has been driven by both longer life expectancies and declining birth rates. In addition to having profound consequences for labor markets and government finances, an aging population will likely have substantial effects on housing markets. In this article, we document how the living arrangements of older households (those 65 or older) have changed over the past 50 years and discuss some of their potential implications.
Briefing
The Prevalence of Apprenticeships in Germany and the United States
The educational systems and labor markets of Germany and the United States take different approaches to preparing young people for the workforce. One feature of Germany's workforce development model that has been of interest to policymakers in the United States is the important role played by employer-financed apprenticeships. The United States instead relies mainly on comprehensive general education, with career training largely taking place in community colleges and other postsecondary institutions. Research has pointed to several factors that may foster apprenticeships in Germany to a ...
Briefing
A More Comprehensive Measure of the Black-White Wealth Gap
In this article, we apply a simple graphical device — the plot of the relative rank distribution — to summarize the Black-White wealth gap. We also introduce the relative rank Gini coefficient — an analog to the standard Gini coefficient — as a summary measure of rank inequality. We find that the rank wealth gap is widest in the middle of the wealth distribution. Black-White rank wealth gaps are higher among college graduates than among other education groups. Households with young or retired heads have higher rank gaps than middle-aged households. We caution that rank gaps are not ...
Working Paper
Stock Market Investment: The Role of Human Capital
Portfolio choice models counter factually predict (or advise) almost universal equity market participation and a high share for equity in wealth early in life. Empirically consistent predictions have proved elusive without participation costs, informational frictions, or non standard preferences. We demonstrate that once human capital investment is allowed, standard theory predicts portfolio choices much closer to those empirically observed. Two intuitive mechanisms are at work: For participation, human capital returns exceed financial asset returns for most young households and, as ...
Briefing
How Couples Approach Portfolio Allocation
The classical theory of household portfolio allocation finds that the share of household wealth invested in risky assets is independent of the level of household wealth. However, this prediction is at odds with empirical observations. This Economic Brief presents findings that reconcile the two. A model in which a household's portfolio allocation reflects the preferences of both spouses, adjusted for the bargaining power of each spouse, predicts that the wealthier a household becomes, the greater the share of its wealth will be invested in risky assets.
Briefing
Are Younger Generations of Women Prepared for Retirement?
We describe changes in the financial circumstances of women over time, focusing on employment, income and wealth. Beginning with the 1920 birth cohort, we show that women's income grew for several successive cohorts, then entered a period of stability. However, there has been no such growth in wealth. This suggests that younger generations of women may not be any better prepared for retirement than their predecessors.