Postwar Trends in Income, Earnings, and Schooling

This chapter first sets out the purpose of the book, which is to consider whether government investment in education and training would be more or less effective at alleviating economic inequality and strengthening the United States economy than direct subsidies to workers who are falling behind. The book explores four paradoxes. First, that in recent decades, educational attainment in the United States has risen faster than the skill requirements that employers seek. Second, even as skill levels and educational attainment have increased, wages have fallen after taking inflation into account. Third, changes in productivity do not appear to be strongly correlated to changes in skills or education, either for particular industries or for the economy as a whole. Fourth, as educational opportunities have improved for a broader segment of the US population, economic inequality has not decreased but rather has increased. The chapter then discusses recent trends in income, wealth, poverty, and inequality; trends in schooling and earnings; and trends in productivity and profitability. Finally, it presents an overview of the subsequent chapters and a summary of key findings.