The National Academies Press

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From page 144... ... Although scholars continue to debate these causes, they point to three sets of factors in the U.S. labor market: • Competitive market forces, like technological change and global ization, that have favored higher-skilled workers much more than their lower-skilled counterparts; • Structural problems in labor markets, such as the fact that firms have more access to labor market information than workers do and the often-high costs to workers of changing jobs, both of which can increase the relative power of employers and lead to lower wages for workers; and • Weakening laws and institutions, leading to stagnant federal mini mum wages and a smaller share of workers who are union members.4 3 The wage data presented in this chapter end in 2019 -- just before the onset of the COVID-19 pandemic. Read the entire page →
From page 145... ... are behind the increasing gap between low- and higherskilled workers, since many of these changes have favored and rewarded workers with college degrees more than less-skilled workers. Technological changes -- and globalization -- have restructured the labor market by reducing the amount of "routine" work required by middle- and high-wage jobs. Read the entire page →
From page 146... ... -- if they are to adapt to changes in the specific skills that the labor market demands and rewards at a given time and place. Structural Problems in Labor Markets A second set of explanations for low wages and labor-market inequality focuses on non-competitive forces in the U.S. Read the entire page →
From page 147... ... suggests that minimum wage increases have larger long-run negative effects, and that large increases are particularly problematic, although there is disagreement about these conclusions as well. Economists also disagree about the extent to which higher minimum wages can reduce poverty. Read the entire page →
From page 148... ... . This is a particular challenge for low-wage women, since the cost of child care relative to their wages can be very high (Borowsky et al., 2022) Read the entire page →
From page 149... ... Rigorous evidence shows that expansions of the federal Child Care and Development Fund's child care subsidies prior to the revision of that program in 2014 increased maternal employment, but also may have worsened child development outcomes (Herbst & Tekin, 2010; see also Baker et al., 2019, and Chapter 4) Read the entire page →
From page 150... ... -- especially in the case of previously incarcerated people. The lower employment rates and earnings of Black men reentering the labor market after incarceration reflect their lower skills and work experience, but also their lack of access to social networks that might help them get jobs and, as confirmed in a number of rigorous studies, clear discrimination by employers (Holzer et al., 2003; Pager, 2003) Read the entire page →
From page 151... ... . But the largely correlational evidence on which that conclusion is based does not prove that policydriven increases in the family incomes of children who are in households living below poverty would reduce intergenerational poverty. Read the entire page →
From page 152... ... . Of particular interest for the current report is the subset of studies that provide causal evidence regarding intergenerational poverty; for example, those that link poverty in childhood to children's adult economic well-being. Read the entire page →
From page 153... ... (2022) tax credit study and the Hoynes et al. Read the entire page →
From page 154... ... . The program's simultaneous impacts on both household income and parental employment make it difficult to determine just how much of the program's beneficial impact on children comes from its boost to household resources and how much from an increase in parental employment or work hours. Read the entire page →
From page 155... ... Parental Employment and Intergenerational Outcomes As noted above, programs like the EITC increase both family incomes and parental employment, and it is unclear which effect is responsible for its beneficial impacts on children. Studies of the effect of incomes on intergenerational poverty are reviewed above. Read the entire page →
From page 156... ... Role Modeling Parental employment might benefit children by creating positive role models or by expanding parents' social networks in ways that improve their children's access to better jobs. On the other hand, children's development, especially in the case of young children, might be compromised if children are placed in substandard child care or if the often-erratic work schedules of parents provide less continuity at home and limits the time parents can spend interacting with their children. Read the entire page →
From page 157... ... , but there has been no rigorous research on this question. Conclusion 6-5: Higher parental earnings and employment among low-income families can potentially reduce intergenerational poverty by raising family income, increasing access to the Earned Income Tax Credit (EITC) Read the entire page →
From page 158... ... In the case of intergenerational poverty, low-income families with higher net worth may be able to use their wealth to pay for their children's education or provide a more stable, safer, or healthier environment for them as they grow up; this, in turn, might reduce the children's chances of being low Read the entire page →

From page 144...

... Although scholars continue to debate these causes, they point to three sets of factors in the U.S. labor market: • Competitive market forces, like technological change and global ization, that have favored higher-skilled workers much more than their lower-skilled counterparts; • Structural problems in labor markets, such as the fact that firms have more access to labor market information than workers do and the often-high costs to workers of changing jobs, both of which can increase the relative power of employers and lead to lower wages for workers; and • Weakening laws and institutions, leading to stagnant federal mini mum wages and a smaller share of workers who are union members.4 3 The wage data presented in this chapter end in 2019 -- just before the onset of the COVID-19 pandemic.