Ahead of a 2016 presidential campaign that’s sure to focus on income inequality and ways to shore up middle-class workers, former Treasury Secretary Lawrence Summers released an analysis Tuesday that concludes that a college education helps address the gap.
Summers co-authored an analysis published by the Hamilton Project, part of the center-left Brookings Institution. Summers simulated the effect that a college degree would have on a working-age man, with an eye toward showing what it’d do for earnings and earnings inequality.
“Increasing the educational attainment of men without a college degree will increase their average earnings and their likelihood of being employed,” the study concluded, not surprisingly.
What was more surprising was the conclusion that increasing education attainment “will not significantly change overall earnings inequality.” That’s because most of the changes in overall inequality have been at the very top, where the rich have become much richer than everyone else.
Summers and colleagues concluded in their simulation that greater educational attainment will reduce inequality in the bottom half of the earnings ladder. That mostly by pulling up the earnings of those ranked around the lowest 25 percent of earners.
The United States should push for more college graduates and skills training for the less-educated because it is “the most effective and direct way to increase their economic security, reduce poverty, and expand upward mobility,” the report said.
However, it warned, boosting skills isn’t just about a college degree.
“Increasing skills will also mean improving K-12 education and providing more training and human capital development in the specific skills demanded by the labor force,” the analysis concluded.
Summers headed President Bill Clinton’s Treasury Department in 1999 and 2000, and led the National Economic Council in 2009 and 2010 under President Barack Obama.
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