Search Results
Working Paper
Stock Market Investment: The Role of Human Capital
Participation in the stock market is limited, especially early in life. By contrast, human capital investment is widespread, especially early in life. Returns to equity are constant across households, while returns to human capital vary. The contribution of this paper is to demonstrate that once human capital investment is allowed for and, critically, disciplined to match observed dispersion in earnings, an entirely standard model of portfolio choice delivers stock market participation rates consistent with the data over the entire life cycle. Moreover, we show that endogenizing human capital ...
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.
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
Home Health Care and Aging in Place
Over time, older households have become more likely to age in place and more likely to receive long-term care at home.One possible reason these trends might be related is that increased access to home health care has facilitated aging in place. Factors making home health care more accessible include an increased proportion of married seniors — which provides more opportunities for informal spousal caregiving — and increased public funding for formal home health care through Medicare and Medicaid.An alternative hypothesis is that other forces have encouraged aging in place, which has in ...
Briefing
Is the US Economy K-Shaped? Evidence From the Past Three Decades
We examine whether the U.S. economy has exhibited "K-shaped" behavior — outcomes for low-income and high-income households moving in opposite directions — over the past three decades.The U.S. economy has not been persistently K-shaped, though income growth showed K-shaped patterns during the recoveries from the 2001 and 2007-09 recessions.Even though income growth has not always been K-shaped, growth rates have been substantially larger for high-income households than for low-income households over the 30-year period we examined.Measured consumption growth has been less divergent than ...
Briefing
How Prevalent Is Holding Multiple Jobs in the Postpandemic Labor Market?
The share of employed Americans who hold more than one job has climbed each year since its April 2020 low, peaking at 6.0 percent at the end of 2025 before easing to 5.5 percent by July 2026.The share of middle-income families and college-educated workers has increased among those with multiple jobs. While additional jobs contribute meaningfully to the worker’s earnings, the increase in earnings does not translate to growth in aggregate consumption.Official statistics almost certainly understate how many people work multiple jobs, particularly in informal and platform-based arrangements.
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
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
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.