Research by Author & Topic

Publications by Robert I. Lerman on Economy

A college education strongly affects whether or not children from poor or low-income families move up the economic ladder when they become adults. But they are less likely to enroll in either two- or four-year colleges, and less likely to complete a degree when they do, relative to those from middle- and upper-income families — even after accounting for differences in academic preparation. We review current federal efforts to help low-income students attend college, and recommend new policies that would improve their academic preparation, provide more effective guidance on selecting and paying for college, and improve retention and graduation rates.

Using data from the Federal Reserve Board's Surveys of Consumer Finances (SCFs), we follow one segment of a cohort over its life cycle—married couples as the husband ages from 36–44 in 1989 to 51–59 in 2004. We find that middle-income and lower-middle-income married-couple households experienced modest income growth but rapid growth in net worth. Overall, the evidence documents significant gains in income and wealth as married couples aged from their late 30s to their 50s.

Despite a plethora of proposals for helping people build assets, policy researchers have provided little methodological guidance about how best to view and evaluate these policies. This paper is an initial attempt to move in this direction, drawing on methods for assessing income-tested and social insurance programs and on analyses of public policies dealing with savings, investments, and risks. It examines whether and in what ways the traditional criteria of incentives, progressivity, and equity apply to an assessment of asset-building policies. Further, it discusses how to design an asset policy to deal with the potential social dislocations arising from gentrification.

Between 1989 and 2004, middle-income parents experienced moderate income growth, but only married parents have gained net worth—a significant fact given that the share of households headed by an unmarried parent increased from 26 to 33 percent over the same period. Using data from the Federal Reserve Board's Surveys of Consumer Finances, income measures alone show that middle-income unmarried parents gained some ground relative to married parents. However, trends in net worth—the value of what households own minus the value of what they owe—diverged by marital status, demonstrating the importance of looking beyond income data.

Over the last two decades, American households have generated healthy increases in wealth, but only modest increases in income.

Building up assets and avoiding excessive debt can help families insure against unforeseen disruptions, achieve economic independence, and reach the middle class. Asset building, however, can be difficult for many low- and moderate-income families, who must overcome many economic obstacles and work off high liabilities to accumulate adequate net worth. This brief examines the levels and assets and debts, saving behaviors, and variations in these data across representative samples of American families in order to identify populations least able to accumulate assets, and examine factors that are linked to asset-building in financially vulnerable households.

The weakening economy and job losses after late 2000 posed a tough challenge for welfare reform's employment strategy. This issue of the Single Parent's Earnings Monitor finds that single mothers retained most of their post-welfare reform gains in employment and wages through the 2001-2003 recession.

Since 1994, the share of single mothers with jobs-the employment rate-increased by 25 percent while the unemployment rate for single mothers fell by about half, according to this first installment of the Single Parents' Earnings Monitor.

This policy brief examines the supposition that job growth in the United States has led to rising earnings inequality. Generally, when economists examine the effects of structural changes in the economy, they use total earnings. Using data from the Survey of Income and Program Participation and the Current Population Survey (CPS), this brief argues that the correct measure for earnings inequality should be earnings per hour (the wage rate). The brief examines earnings inequality through the wage-rate lens, contrasts the findings with those of other studies, and suggests implications for policy and interpreting economic trends. An addendum addresses difficulties with using CPS data.