SEARCH: Economic Strategy Group

The Higher Wages Tax Credit

  In the face of continued low employment, stagnant wages, persistent poverty, and rising inequality, minimum wage increases will likely continue to hold appeal as a policy response. In this paper, I propose a Higher Wages Tax Credit (HWTC) to partially offset the costs imposed by minimum wage increases on firms that employ low-skilled labor. […]

The Challenges of Leveraging Online Education for Economically Vulnerable Mid-Career Americans

  Economic and technological change has made lifelong learning more important than ever and partly explains the rise of online education, the flexibility of which appeals to mid-career Americans. Most existing online education appears to result, however, in poor learning and labor market outcomes. Promising models of low- cost, high-quality online education are only now […]

A Policymaker’s Guide to Labor Force Participation

  Labor force participation among prime-age workers has been declining for many decades. This memo aims to provide policy makers with a useful framework for thinking about the question: “Why are so many people deciding that seeking work isn’t worth it?” After reviewing relevant facts and trends about labor force participation in the United States, […]

Policies to Reintegrate Former Inmates Into the Labor Force

  Incarceration rates in the United States have more than tripled in recent decades as rehabilitation has gradually taken a back seat to a policy agenda emphasizing punishment and incapacitation. This raises important questions about the effectiveness of state and federal prisons in the United States, and about whether the resources required for long prison […]

Maintaining The Strength of American Capitalism

The American economic system has always been the foundation of our national strength. But this foundation is showing cracks—from high levels of income inequality, declining economic mobility, and persistent economic insecurity among low- and middle-income Americans.

Causes, Consequences, and Policy Responses to Market Concentration

Overview: Measures of market concentration in many U.S. industries have been rising for nearly four decades. Since the early 2000s, these trends have coincided with a falling labor share of income, declining private investment, and rising corporate profit rates and markups (the difference between price and marginal cost). Philippon argues these patterns are unique to […]

Concerns About Concentration

Overview: A number of studies in recent years have fueled policymakers’ concerns over rising market concentration and the state of competition in US industry. However, determining the relationship between market concentration and other key economic outcomes­—such as markups, profit rates, labor share, and the state of competition more broadly—is fraught with empirical challenges. The state […]

Fiscal Policy With High Debt and Low Interest Rates

Overview: The U.S. budget trajectory is in uncharted territory. The country faces a structural deficit, accrued the largest increase in debt on record during the current economic recovery, and is expected to surpass its WWII-era debt-to-GDP record of 106 percent within the next 30 years. Gale argues that although historically low interest rates reduce the […]

Can Innovation Policy Restore Inclusive Prosperity in America?

Overview: US productivity growth¬—the engine of long-run wage growth—has been lackluster for the past decade. Meanwhile, US public investment in research and development (R&D), is near historic lows. Although private sector R&D investment has increased over time private sector funding is insufficient to bring about desired gains in productivity growth and wages. Van Reenen argues […]