IPR Faculty Research Drives Policy Solutions in White House Economic Report
IPR economist and CEA member Kirabo Jackson co-authors high-profile report in U.S. policymaking
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The 2024 "Economic Report of the President" explores some of the country's greatest economic hurdles, such as the shifting demographics of the workforce and the drug overdose crisis. The report presents policymakers with possible solutions with the support of research from top academics, including several IPR faculty.
This year’s report, compiled by the White House Council of Economic Advisers (CEA), was co-written by IPR economist Kirabo Jackson. He was appointed by President Joe Biden as a senior member of the CEA last August. The CEA sits within the Executive Office and delivers research-driven recommendations on matters of national and international economic policy to the president.
Trends in the Labor Market
The report examines persistent challenges within the job market, particularly focusing on racial disparities in unemployment rates, highlighting that Black individuals face higher unemployment rates compared to their White counterparts.
Drawing from a study by IPR economist Jonathan Guryan and Yale University’s Kerwin Charles, the report emphasizes the role of racial prejudice in perpetuating these differences. The 2008 study estimated that a quarter of the racial wage gap can be attributed to prejudice.
Filling Workforce Gaps and the Benefits of Childcare
As the U.S. population ages, the number of workers has dwindled, profoundly impacting the labor force. In 2022, the number of people aged 25 to 54, often called "prime-age" workers by economists, went up by just 40,000. Meanwhile, the number of Americans 65 and older jumped by 2 million. The report underscores the contribution of immigrants in bridging labor-force gaps across different occupations and regions.
For instance, immigrants play a pivotal role in encouraging Americans to participate in the labor market. The report points to a study by strategy professor and IPR associate Benjamin Jones and his colleagues that suggests that immigrants act more as "job creators" than "job takers” by initiating new businesses, generating employment opportunities, and reducing the cost of household services provided by the market
According to the report, prioritizing investments in children's health and education is a proven strategy to increase work productivity, echoing the commitment of the Biden-Harris administration to support children.
The report refers to research by IPR adjunct and University of California, Irvine economist Greg Duncan with University of Wisconsin-Madison economist Katherine Magnuson (PhD 2002) finding that beyond the immediate benefits, high-quality childcare significantly influences outcomes like school readiness, cognitive skill development, and future employment prospects.
To further support the benefits of school spending, the report cites Jackson’s study with University of California, Berkeley economist Rucker Johnson. In it, they examine how changes in funding for Head Start and K–12 education affected children later in life. They find that policy-driven increases in Head Start and K–12 spending improved educational attainment and earnings while reducing poverty and incarceration rates for poor children.
Competition and Physician Prescribing
In the U.S., death rates from causes, such as motor vehicle accidents, homicides, suicides, and drug overdoses, are on the rise among older children and middle-aged adults. Notably, drug overdose deaths have surged in recent years, overtaking other causes of death. The report investigates the upsurge in opioid-related fatalities during the mid-1990s and its continued impact today.
The report references findings by IPR economist Molly Schnell, Princeton economist Janet Currie, and economist Anran Li (PhD 2024), who will join Cornell’s economics department in the fall, indicating that increased competition among healthcare professionals for patients led to a more lenient approach to opioid prescriptions. The report also highlights a study by Schnell showing that doctors who were stricter about prescribing opioids became more cautious when there was a risk of the drugs being diverted to other users.
Infant and Maternal Mortality
In 2022, the Biden-Harris Administration released a blueprint detailing strategies to decrease maternal mortality rates and address disparities in healthcare access and outcomes among women. The report noted the advancements made in maternal health and the narrowing of racial mortality gaps, spotlighting a study by IPR economist Hannes Schwandt and his colleagues. Their research revealed a significant rise in life expectancy among Black Americans between 1990 and 2012, particularly in low-income areas.
“The story of America is one of progress and resilience, of always moving forward and never giving up. It is a story unique among nations—we are the only country that has emerged from every crisis stronger than we went in,” President Joe Biden wrote in the report’s introduction. “That is what’s happening across America today. There is still work to do, but I’ve never been more optimistic about our future.”
Kirabo Jackson is the Abraham Harris Professor of Education and Social Policy and Professor of Economics. Jonathan Guryan is the Lawyer Taylor Professor of Education and Social Policy. Benjamin Jones is the Gordon and Llura Gund Family Professor of Entrepreneurship and Professor of Strategy. Molly Schnell is an assistant professor of economics. Hannes Schwandt is an associate professor of human development and social policy. All are IPR faculty members.
Photo credit: iStock
Published: June 6, 2024.
