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3 - Human Capital and Long-Run Economic Growth

from Part II - Labor and Economic Growth

Published online by Cambridge University Press:  21 October 2021

By
Flávio Cunha
Edited by
John W. Diamond  and
George R. Zodrow
John W. Diamond
Affiliation:
Rice University, Houston
George R. Zodrow
Affiliation:
Rice University, Houston
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Summary

In recent decades, the US economy has experienced a decline in the growth rate of labor productivity and an increase in economic inequality. This chapter reviews the empirical literature that suggests that these two facts are partially determined by the decline in the growth rate of the supply of skilled labor. It provides evidence that this downward trend in the growth rate of the stock of human capital has occurred in spite of significant progress in access to post-secondary education. The literature summarized here suggests that achieving higher growth rates in skills supply requires improving the post-secondary enrollment and graduation rates of children born in disadvantaged families. This is a challenge because disadvantaged children tend to lag very early in life in developing the skills that would make them college-ready. Therefore, public policy needs to invest more in the human capital of disadvantaged children, during early childhood as well as their school-age years. The chapter summarizes the impact of promising interventions that could shape public policy along these lines, fostering a diverse set of dimensions of human capital.

Keywords

human capitallabor productivitysemiconductor industrybiotechnology industryinequalitysocioeconomic gaps
Type
Chapter
Information
Prospects for Economic Growth in the United States , pp. 41 - 77
Publisher: Cambridge University Press
Print publication year: 2021

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