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Key takeaways

  • A key structural issue affecting inequality and social mobility is the skills gap.  Skills are multiple in nature and can be shaped by families and other influences, not only schools.
  • Families are the primary producers of skills and policy makers should institute policies aiming to support families in engaging and nurturing their children. Additionally, more informed and motivated parents foster better schools by sending children to them who are qualified, motivated to learn, and who have already been taught basic skills.
  • This paper distinguishes between skills and education, highlighting the potential for high-quality, early childhood education programs to bridge the skills gap.
  • Although this was not always true, the current gaps associated with race and ethnicity are largely skills-based.


Societies everywhere face the problems of poverty, inequality, and economic and social immobility. The severity of these problems differs by country. Governments everywhere, including those in the United States (U.S.), are enacting policies to alleviate them. Historically the U.S. has utilized a strategy of redistributional taxes and income transfers, and a strategy of promoting education by spending on public schools and trying to boost test scores. While such redistributional policies reduce income and consumption disparities, they have failed to significantly reduce and prevent the underlying structural causes of poverty and inequality. Many studies suggest that a major underlying structural issue is the skills gap – or the differences in skills among various groups in the population. By adopting a comprehensive approach to skill development, the U.S. can begin to implement effective policies that address structural poverty and inequality. But to do so, policy makers must understand what skills are needed, when they should be developed, how they are best formed, how they are best measured, and whom these policies should target.

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