Economic Trends in the Classroom

Study questions to accompany Economic Trends-Cleveland Fed articles that fill you in on the current state of the economy.

Study Questions: Educational Attainment and Earnings

Educational Attainment and Earnings. Read more

Study Questions: Educational Attainment and Earnings

  1. Describe the growth trend in median household income over the last decade.
    • Median household income growth in the U.S. slowed over the last decade; median earnings for all workers grew more slowly after 2000 than they did in the 1990s.
  2. Name one importatnt factor that may have influenced the slowdown in earnings growth.
    • Educational attainment may have affected the slowdown. Research has shown that educational attainment helps determine employment and labor force participation patterns and other labor market outcomes. Very distinct patterns emerge when earnings are examined in terms of educational attainment.
  3. Discuss the median earnings of different groups according to their educational attainment.
    • Over the past decade, different levels of educational attainment have been associated with large gaps in median earnings. For instance, the median earnings of people with bachelor's degrees in 2005 were 61 percent higher than those of high school graduates. Similarly, the median earnings for those with advanced degrees were 25 percent higher than for those with bachelor's degrees.
  4. Over the last decade, earnings grew in the population as a whole, but were flat within educational attainment groups. How can this variation be explained?
    • One explanation is that overall earnings increased because workers moved to higher levels of educational attainment, boosting their earnings. Between 2000 and 2011, the share of full-time workers who held advanced or bachelor's degrees increased significantly. In 2000, 31 percent of workers held such degrees; by 2011, 38 percent did.
  5. How has the demographic composition of attainment groups changed overtime and how has the change affected earnings?
    • The share of bachelor's degree holders who are females has increased steadily over recent decades. However, because women tend to earn less than men, the higher share of females may have muted earnings growth for BA holders overall. In addition, changes in unemployment and labor force participation rates could have influenced the earnings of full-time workers.

Study Questions: The Employment Report and Displaced Workers

The Employment Report and Displaced Workers . Read more

Study Questions: The Employment Report and Displaced Workers

  1. The U.S. economy remains down 7.75 million jobs almost three years after the peak of employment in December 2007. Describe what conditions make this cycle particularly striking when compared to previous recession-recovery periods.
    • The depth and length of the recession coupled with the shallowness of the recovery make this cycle striking when compared to previous recession-recovery periods. Another striking feature is the severity of the cycle, which is reflected in the number of unemployed workers, 6.1 million, who are currently unemployed and have been out of work more than 27 weeks.
  2. The Displaced Worker Survey conducted by the Bureau of Labor Statistics every two years asks long-tenured workers who are older than 20 years of age, about the nature and cause of job displacement over the last three years. How have the reasons cited for displacement changed over the different survey years?
    • In 2002 and 2008 the reason cited for displacement was the closing or moving of a plant or company. While in 2010, the most frequent response from workers was that they were displaced because their employer may be still operating, but not have enough work to keep them employed.
  3. What were the re-employment rates for displaced workers in 2002, 2008, and 2010? What industries had the highest and lowest re-employment rates in 2010?
    • In 2002 the re-employment rate was 63.4 percent; in 2008 it was 67.1 percent; and in 2010 it was 48.8 percent. Re-employment rates were lower across all industries in 2010, but people displaced from finance, insurance, and real estate industries had high re-employment rates, while workers in the durable-goods industries had very low re-employment rates at 33.4 percent.
  4. What is the difference between structural and cyclical unemployment?
    • Structural unemployment is described as a skill mismatch in which firms may have vacancies and there are unemployed workers, but hiring is slow because the skills of the unemployed workers do not match the requirements of the open positions. Cyclical unemployment is described as the result of businesses having weak demand for labor because of a decrease in consumption and spending.