The analysis of rising inequality and its effects in the United States and elsewhere over the past generation has suffered from a relative downplaying of the role of the family and how income gets earned and then transformed Into well-being. Central to this is the rapidly changing economic role of women in the workforce, but that is not all of it. We need more and better analyses of her public policy needs to shift in the context of changing family structure and rising inequality. Elizabeth Jacobs presents some of our thinking about how Equitable Growth is and will be trying to support this effort: Elizabeth Jacobs: Rethinking 20th century policies to support 21st century families: "...As a raft of research illustrates, economic growth is increasingly concentrating at the top...
...with historically high shares of national income flowing into the pockets of those at the very, very top of the income ladder. This rise in income inequality stands in stark contrast to the period of broadly shared economic growth that characterized the U.S. economy from the aftermath of the World War II through the early 1980s.
This rise in income inequality over the past four decades was accompanied by monumental shifts in families’ economic lives. Women’s labor market participation, especially that of mothers, shot upward. At the same time, the risk-sharing relationship between firms and workers fundamentally shifted, as new forms of health insurance, retirement benefits, and other forms of nonwage compensation pushed downside economic risk onto the shoulders of workers and their families. The result: destabilized household balance sheets and families’ lives, problems that are not adequately mitigated by outdated public policies grounded in New Deal-era assumptions about the way people live their day-to-day lives....
Understanding individual workers’ economic well-being requires understanding them in the context of their families. This is all the more true as family structures in the United States continue to evolve. A family perspective also allows for a multigenerational lens. We know that children’s long-term outcomes are shaped in important ways by their early experiences, but the impact of family may matter well beyond childhood. For instance, access to parental wealth may shape risk preferences in ways that impact innovation and entrepreneurship for adults. And the needs of elderly parents may fundamentally shape adult children’s economic well-being.... The rise in women’s labor market participation, for example, creates a new set of challenges for many families, as women’s traditional role as family caregivers—for babies but also for elder relatives—is chaotically upended. Yet research on the consequences of providing paid family and medical leave show that well-designed policies may improve the outcomes of the children and elders receiving childcare and elder care, boost women’s long-term labor market outcomes, and decrease the likelihood that recipients need other public benefits such as supplemental nutrition assistance, Temporary Assistance for Needy Families, and Medicaid....
How have public policies evolved—or failed to evolve—to mitigate these risks? What do these risks mean for the health of the U.S. economy as a whole? And what kinds of policy interventions are best suited to solving these challenges, particularly in the context of a rapidly changing labor market where the future of work may be organized very differently—with dramatically different consequences for families depending on their places on the U.S. income and wealth ladders. This is the core set of questions that our Family Economic Security portfolio seeks to answer...
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