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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.
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