Increasing Education: What it Will and Will Not Do for Earnings and Earnings Inequality

Those of us who argue for the imperative of increasing skills are not staking out that position because we believe it will close the gap between the rich and the middle—or between the exorbitantly rich and the merely rich. Rather, we take that position because higher levels of skills will improve the economic position of those around and below the middle of the current earnings distribution. On average, more education does translate into more-valuable skills, and the results of our simulation exercise support that view. At the same time, they make it clear that increasing the share of working-age men that have college degrees will do very little to decrease the overall level of earnings inequality.