Charts

A number of sectors—most notably retail, finance, and utilities—show considerable increases in concentration. Manufacturing shows less growth, but industries within manufacturing tend to be highly concentrated. Even the service sector, which has a low average level of concentration, has seen considerable growth over the past three decades (47 percent).

In industries such as “search engines,” “wireless carriers,” and “delivery services,” there are clear cost savings from large scale. High fixed costs—the infrastructure and technological expertise necessary to maintain a quality service—can be spread across many customers. Consequently, the respective top two firms in each market command 87 percent of the search engine market, 69 percent of the wireless carriers market, and 76 percent of the delivery services market.

From 1985 to 2014, mergers and acquisitions (M&A) as a share of publicly traded companies have increased from just 0.06 percent to 0.24 percent annually: relatively few firms merge in any given year, but the share has increased considerably. However, this increase was not matched by a similar rise in the value of M&As as a share of market capitalization.

If two firms in a market are owned by the same people, those firms likely have less motivation to compete vigorously than would two firms owned by different people. Accounting for common ownership significantly increases measured market concentration, and this effect has grown over time.

After a strong surge in the 1990s, net investment has fallen to less than half of its 1970s level. Recent research suggests that rising concentration is indeed related to the deterioration in investment: after adjusting for firms’ expected profitability and considering a number of alternative explanations, increased concentration emerges as a key driver of falling investment after 2000.

Many firms have at least some wage-setting power derived from the willingness of their employees to accept lower wages than they could earn elsewhere. Economists attempt to quantify this employee willingness to accept lower wages in terms of the so-called labor supply elasticity. That is, what percent lower employment would a firm expect if it offered 1 percent lower wages? In general, firms face relatively inelastic labor supply.

There is substantial variation in employer concentration across the country: for example, parts of the Northeast and Southern California have HHI—a measure of business concentration—below 1,500, while numerous rural areas in the Great Plains have HHI above 5,000, indicating extreme concentration.

The Federal Trade Commission almost always blocks mergers that would leave only one or two remaining competitors, while mergers leaving three or four competitors are only sometimes challenged. In recent years, antitrust regulators have become much less likely to act against mergers that would leave five, six, or seven competitors, while becoming slightly more likely to block mergers that would leave only one to four competitors.

Across sectors of the economy, business start-ups are less common than they were decades ago. The continuous decline across those three years demonstrates that the disappearance of start-ups is an ongoing trend and not primarily a cyclical phenomenon. The consistent fall in start-up rates across industries is suggestive of a broad-based rather than sector-specific trend.

In 1987 both relatively young firms (age 0 to 10) and small firms (with 49 or fewer employees) accounted for roughly a third of total employment, but by 2014 this share had dropped to 19.0 percent for relatively young firms and 27.2 percent for small firms. While young and small firms have both dwindled in labor market importance, the position of young firms has deteriorated more rapidly.

A new dataset from the Census Bureau—the Business Formation Statistics—reveals that the typical time between application and business formation has steadily increased in recent years, from 4.5 months to 5.7 months between 2004 and 2013. In addition, the number of high-propensity business applications, defined as those applications that have characteristics associated with becoming an employing business, has declined from about 350,000 in 2004 to 290,000 in 2013.

This chart examines trends in entrepreneurship—defined here as self-employment with at least 10 employees—by the educational attainment of entrepreneurs. For people with more than a high school diploma, entrepreneurship is a less common vocation than it was 25 years ago. The decline is especially pronounced among those with advanced degrees: in 1992 4.0 percent of 25- to 54-year-olds with an advanced degree (beyond a bachelor’s) were entrepreneurs. By 2017 this rate had fallen to 2.2 percent.

This chart documents the sharp rise in state and local use of targeted business incentives for export-base industries (businesses that sell outside the local area or compete with goods and services from outside the local area). These incentives—job creation, investment, and R&D tax credits, as well as property tax abatements and job training subsidies—collectively rose from 0.5 percent of business value added in 1990 to 1.4 percent in 2015.

More than a fifth of all employees hold licenses, but the fraction varies considerably across professions. Health-care practitioners and legal workers are the most likely to be licensed, with 73 and 61 percent of workers licensed, respectively. Additionally, licensed workers—who generally must pay to be relicensed after an interstate move—are much less likely to move across state lines than are comparable workers without licenses, but only slightly less likely to move within their state.

This chart focuses on one large licensed occupation, showing how licensing policies vary for nurse practitioners across the states. Though public discussion of the institution often focuses on occupations that have been more recently licensed (e.g., interior designers or tour guides), the economic impacts of licensure are likely to be especially important in the economically large health-care sector, which accounts for more than one-quarter of all licensed workers.

Patent counts are one way to measure innovation. They are an imperfect measure, however, because patents vary in importance and some might be low quality. Due to varying standards, it is more difficult to make cross-national and over-time comparisons; making those comparisons can be informative about both innovation and differences in countries’ patent systems, however.

This chart shows the steep drop-off in women’s participation at each stage of involvement in STEM. Although 57 percent of all four-year degrees are earned by women, only 35 percent of STEM bachelor’s degrees go to women. Participation in innovation is even more limited: women make up just 22 percent of the STEM workforce and are responsible for only 16 percent of granted patents.

The innovation pipeline requires large inputs of R&D spending that might be difficult to monetize due to their substantial spillovers to the broader economy. In addition, these investments often yield benefits only many years later, which can complicate the process of organizing and financing the investments.

Though many patents are certainly valuable to workers and firms that possess them, it might be less immediately obvious whether patents are closely associated with innovation. Measuring this link is critical to understanding both the social benefits of the patent system and the usefulness of the patent-based approach to analyzing innovation. In this chart the share of firms reporting that they had implemented an improved product, service, or business method is plotted against the number of patents generated by every 1,000 employees.

Between 2000 and 2015, 59 percent of U.S. patents were awarded to applicants living in 20 metro areas with only 36 percent of the population. This chart shows the number of patent grants by metropolitan statistical areas, with larger circles indicating proportionally larger numbers of patents.

Patents are both a tool for promoting innovation and a useful metric by which to measure it. However, patents—even valid patents—also impose significant costs. This chart shows the annual number of defendants sued in patent lawsuits—a proxy for litigation costs—broken out separately for lawsuits filed by NPEs and operating companies.

Beyond R&D spending, a crucial input into producing patents is education. Contrary to the stereotype of the college-dropout entrepreneur, innovation—at least as measured by high-quality patent activity—is almost exclusively accomplished by people with advanced degrees.

While patents can and do come in all fields, the stereotype of a scientist or engineer generating a patent is broadly true, and industries with more STEM workers tend to patent more. STEM workers are distributed highly unevenly across industries.

This chart shows the fraction of immigrants in the United States in the labor force, STEM workforce, PhD-holding population, high-quality patent-holding population, and among Nobel Prize recipients in the sciences.

R&D spending—a key input into the innovation pipeline—is associated with a higher output of high-quality patents (defined as those filed in at least two offices). This relationship is evident within countries, and is also apparent when comparing countries, as shown in this chart.

From basic research to developing and bringing a new product to market, technological progress is increasingly costly. Although total R&D spending has increased as a share of GDP from  1953 to 2015, the share has increased little since the early 1980s, implying that the dollar value of R&D spending has risen along with GDP in recent decades.

By comparison with the previous three business cycles, inflation-adjusted wage growth since 2007 has been relatively strong. It is slightly ahead of the growth seen during the 1990s or 2000s business cycles and is notably higher than growth in the 1980s.

Diminished dynamism can impede the reallocation of resources to high productivity firms; recent research indicates that the decline in dynamism in the tech sector occurred at the same time as the decline in productivity growth. This lower productivity growth in turn restrains wage growth.

In recent decades American workers have become less likely to move to new places and to new jobs. At the same time, workers are switching jobs less frequently and staying longer at the jobs they have. Diminished worker mobility might have an important negative impact on workers’ wage growth. 

Although the increased demand for educated workers explains much of the rise in wages for workers in the upper part of the wage distribution, other factors account for wage stagnation among lower-income workers as well as the broader decline in the labor share of income. One such factor is the decline in union membership.

White women have seen a wage increase of 34 percent, while black and Hispanic women have both experienced growth at around 17 percent. Women’s wage levels remain below those of men, but the gender wage gap has narrowed over time.

Globalization has conferred a number of benefits for workers. Trade has lowered consumer prices, helping increase real wages; moreover, exports can be an important source of productivity and wage growth. However, U.S. imports are more likely than U.S. exports to be produced by low-skilled workers, suggesting that trade may put downward pressure on wage growth for low-skilled American workers.

The wage benefit to a college degree increased remarkably during the last two decades of the 20th century, leveling off around 2000 at a historically high level, as demonstrated by the figure on the left. These changes in college attainment and the college wage premium reflect an evolving mix of individuals attaining college degrees as well as shifts in the relative demand for high-skilled labor.

Wage inequality has been on the rise over the past several decades. Much of the growth in wages has been concentrated at the top, with wages in the top quintile growing from $38 per hour in 1979 to $48 per hour in 2016—a 27 percent increase.

Long-term wage stagnation can be traced to many trends, including the decline in labor’s share of income. Over the past few years the U.S. labor share has ceased falling, but this might reflect the ongoing economic recovery rather than any change in the long-run downward trend.

During the Great Recession workers with wages in the bottom three income quintiles—60 percent of all workers—experienced limited or no growth in their wages. For the top-earning 40 percent of workers, wages increased by more than 1 percent over the same period. Since 2010, however, wage growth has accelerated for all workers, and particularly for the lowest-paid workers.

Measured wage growth reflects changes in wages for continuously employed workers as well as changes in the composition of the workforce. That latter component of wage growth evolves as workers of varying wage levels enter and exit employment. This figure displays the drag on median weekly earnings growth from the changing composition of the full-time workforce. 

Given the importance of labor productivity growth for facilitating wage growth, the slowdown in productivity growth in the United States has likely had negative effects on workers. These figures show real productivity growth, inflation, and nominal wage growth for the periods 1981–2007 and 2008–17, and also investment growth over these periods.

While in the long run real wage growth depends on productivity and the distribution of gains from productivity, over shorter time horizons wage growth can be determined by the supply and demand for labor. When there is extensive slack in the economy—such as during a recession or the early phase of a recovery, when labor and capital are underutilized—wage growth can be temporarily lower. At these times, there are more unemployed workers and hiring demand is low, both of which put downward pressure on wages.

This figure shows that nominal annual wage growth has been just 2.4 percent since the start of the Great Recession, contrasting with nominal wage growth above 3.0 percent in each of the previous business cycles. Typically, nominal wage growth rises later in expansions and falls during recessions, while real wage growth may jump up or down with variation in inflation. But the most recent expansion has seen little uptick in nominal wage growth, especially in contrast to the previous three expansions.

Each month, The Hamilton Project has examined the “jobs gap,” which is the number of jobs that the U.S. economy needed to create in order to return to pre-recession employment levels while also absorbing the people who entered the potential labor force each month. The jobs gap closed in July 2017.

This map shows the average annual percentage of children living in households experiencing very low food security, from 2013-2015. The state averages range from a low of 3.3 percent in Iowa to a high of 9.1 percent in Oklahoma.

This chart shows the average annual percentage of children living in food insecure households in each state from 2013-2015. In 22 states, more than 20 percent of children lived in food insecure households.

This chart shows the distribution of the amount of debt on which students who entered repayment in 2011 defaulted on their debt. Defaulting on federal student loans has consequences for borrowers beyond affecting credit scores. There are direct financial consequences to default such as wage garnishment and offsets of tax refunds and Social Security payments. Among those who defaulted on their student loans, two thirds defaulted on less than $10,000.

This chart shows the age distribution of undergraduate students by the type of institution in which the students were enrolled in 2015. While the plurality of students at both four-year and public two-year institutions are between the ages of 18 and 24, students at for-profit institutions tend to be older: almost half are age 30 or older. Nonetheless, more than 20 percent of undergraduate students at four-year institutions are over the age of 24.

This chart describes the distribution of outstanding federal student debt in the final quarter of 2015. Over the past 15 years, the number of student loan borrowers doubled while the amount of outstanding federal student debt quadrupled.

This chart describes federal and state expenditures that support students and public institutions of higher education. Student financial aid has increased dramatically over the past 15 years, but state direct aid to institutions has stagnated. Currently, direct federal support to institutions is minimal, even though evidence suggests that greater institutional spending increases rates of college completion.

This chart shows the early-college outcomes for low-income versus high-income students. While there are many reasons for both poor and positive postsecondary outcomes for low-income students, characteristics of institutions and early progress in acquiring credits are perhaps more proximal indicators of whether a student is on-track to complete. 

This chart shows the rates of enrollment postsecondary programs among by gender from 1980-2014. For the past twenty years, women have outpaced men in college attendance and degree attainment: since 1980, four year degree attainment rates have increased by 7 percentage points among men and 16 percentage points among women. 

While evidence shows that certain policies such as state-supported programs and targeted interventions do seem to be effective at increasing college enrollment, evidence also suggests that federal tax credits generally do not increase enrollment rates, despite the large scale of investments in these areas. This chart shows those effects.

Is getting a college degree worth the investment? Although the labor market return to a college degree varies, particularly by the characteristics of a student and her chosen field of study, those with postsecondary degrees generally have higher lifetime earnings than those who do not. This chart shows the lifetime earnings of those who completed different levels of education.

The prices consumers pay for fossil fuels are low relative to costs for other energy sources. In particular, natural gas has become a very inexpensive source of energy. However, this is only one part—the private cost—of the total social cost of generating electricity with fossil fuels. These private costs are shown in blue in the chart.

Much of U.S. infrastructure was not designed or built with climate change resiliency in mind, and as a result, much of U.S. infrastructure is vulnerable to the effects of climate change. This map shows the bridges that would be considered vulnerable to flooding caused by projected climate change, from 2051–2100. 

If global carbon dioxide emissions continue to grow according to their current trajectory, the United States will feature a very different range of climates than it currently does. By 2100 the majority of U.S. states would experience summers hotter than those of Mexico in 2012. These maps show the projected increase in temperatures.

The U.S. share of GHG emissions is projected to drop over time as developing countries’ emissions grow and the United States continues to limit its new GHG emissions and experience relatively slow economic growth. By 2050 the shares of cumulative GHG emissions accounted for by China and India will be larger, at 20 and 6 percent, respectively, while the U.S. share will have dropped to 16 percent. By 2100 China and India will have produced over one-third of global cumulative GHG emissions.

Prior CO2 emissions have already resulted in substantial global temperature increases. A common misconception about climate change is that the imminent exhaustion of fossil fuel resources will act as a natural restraint on CO2 emissions and associated temperature rise. In fact, fossil fuel resources remain extensive, particularly in the form of coal. If world economies used all of the remaining fossil fuel resources that can be profitably extracted with current technology and prices, the total temperature impact is projected to be 2.8°F (1.6°C). Policy actions—and not the natural exhaustion of fossil fuel resources—will likely be required to avoid these outcomes.

This chart shows the trends in temperature on Earth from 1880–2015.

The United States is experiencing large increases in energy production, including both conventional fossil fuels and renewable sources.The surge in domestic production of both fuels has not only sharply reduced imports, but also created export opportunities that were widely unexpected as recently as a decade ago. Combined with stable demand, the surge in domestic energy production has resulted in lower prices across multiple fuels, most notably oil and natural gas. The result is that American consumers are spending less on energy than at any time in decades.

Sea-level rise, in conjunction with storm surges, will be very costly even if appropriate preparations are made. As shown in this chart, the Environmental Protection Agency (2015c) estimates that the cumulative expense of sea-level rise and storm surges associated with climate change would be roughly $810 billion by 2100.

Government investment in energy-related research and development has varied considerably over time, alternately receiving encouragement during periods of perceived crisis and lower support during periods of low prices and abundant supply. Notably, this pattern holds true across the industrialized nations shown in this chart, reflecting the fact that they all experienced the same changes in global energy markets.

This figure highlights the growing interaction between transportation and energy sector carbon dioxide emissions. As the range of energy sources for vehicles widens and electric vehicles become more common, it will become increasingly important to design policies that account for carbon dioxide emissions wherever they are generated.

For decades, growth in emissions from the electric power sector outpaced that of the transportation sector. However, transportation recently surpassed the power sector as the largest source of U.S. energy-related carbon dioxide emissions in 2016 for the first time since 1979 (Vine 2016). This chart shows that shift. 

Even without implementation of the Clean Power Plan, renewable power—derived largely from wind, solar, hydroelectric, and geothermal sources—is projected to exceed coal-powered generation by 2048. This chart displays the net electricity generation by fuel source since 2000 and projected generation to 2050, shoing that production of electricity from natural gas and renewables has increased in recent years, whereas production from coal has fallen.

The federal government’s social insurance programs have changed considerably over time. Accurate information about their coverage and performance is essential to having a productive discussion about the possibilities for reform. These figures show this trend.

Restricting focus to workers with a high school diploma or less, this chart shows that much of the uptick in hiring during the energy boom has come in the form of workers who were already employed, rather than those who were persistently nonemployed prior to hiring. This type of detail is useful for understanding the labor market impacts of technological shocks.

In recent years, this migration pattern has largely persisted, with rural populations continuing to decline in most of the country. The trend is particularly pronounced in the eastern half of the United States, as shown by calculations from the USDA’s Economic Research Service. This chart displays that trend.

The Current Popoulation Survey generates the labor force participation rate, an estimate of the fraction of the adult population that is either working or seeking work. This chart depicts labor force participation rate since the mid-twentieth century. 

Within a major field of study, graduates go on to pursue a range of occupations that vary widely in terms of annual earnings. For example, among 35- to 44-year-old college graduates who majored in finance, about 25 percent are employed in the top three occupations: accountants and auditors, financial managers, and other managers.This chart shows the earnings within these occupations by gender for individuals aged 35–44. 

After 10 years in the labor market, the typical four-year college graduate can expect to earn $27,000 more per year than the typical high school graduate. Given the high and increasing expense of a college education, this is no small part of the motivation for most students’ enrollment.

Private businesses make extensive use of the American Community Survey in determining when and where to open or expand stores, distribution centers, and warehouses. The ACS is useful for all these purposes because it provides detailed coverage of local areas. In this chart the capacity of the ACS to yield such information is demonstrated with a particular example: the share of the elderly in each local population. 

This chart shows that workers who are licensed are different from otherwise comparable certified workers—i.e., workers with a job credential that is not legally required to practice—in their propensity to move. Though licensed workers move within state at about the same rate as comparable certified workers, licensed workers are much less likely to move across states than are certified workers.

Drawing on data from the Current Population Survey, this chart shows that children whose mothers hold four-year degrees are nearly as likely to live with married parents today as they were in 1979. Strikingly, their counterparts with mothers who have only a high school diploma or some college have seen the share of children living with married parents decline sharply over the past 40 years.

One of the most important policy changes over the past quarter century was the shift to a work-based social safety net. The data for this chart, which shows the employment rates of women by marital status and number of children, come from the Current Population Survey, which helps answer a variety of important questions. Some of these questions are addressed in annual supplements, like the “Current Population Survey Annual Social and Economic Supplement,” conducted every March. 

Over the past decade, domestic production of energy shot up as new technologies facilitated the extraction of previously unobtainable deposits. Estimates from the Energy Information Administration (EIA) provide crucial context for this development. This figure tracks these developments and projects future energy imports and exports. 

Because of its large size and distance from other developed economies, the United States is a relatively closed economy, with international trade amounting to a fairly small portion of its economic output. However, the role of trade has increased over recent decades, with imports persistently exceeding exports. This chart depicts these developments using data from the Bureau of Economic Analysis.

Manufacturing tends to be a cyclical industry that prospers during strong economic times and languishes in bad, and the Great Recession that started in 2007 was especially destructive to the sector. This chart shows the percent change in manufacturing employment from 2007–2016.

Inflation calculations are important in part because payment increases under Social Security and other compensation programs are indexed to them. If inflation is over-stated, the total cost of the benefits will rise, causing a ripple effect through the budget. The Consumer Price Index is vital to understanding wage growth. 

This chart highlights the ability of the American Community Survey (ACS) to yield local estimates of specific types of workers—in this case, engineers—that a business may want to hire. 

This chart shows that agricultural exports ranging from grains to livestock have grown since 2000. This growth is fueled by steadily increasing demand in foreign economies as well as falling energy costs for agricultural producers in recent years.

The Bureau of Labor Statistics publishes a number of alternative measures that add information to provide a more comprehensive picture of the labor market. One of these measures, called U-6, includes discouraged workers and others who are outside the labor force but want work, as well as those who have part-time work but would prefer full-time work. As shown in this chart, this measure is substantially higher than the traditional unemployment rate.

Indicators of stress are related to negative health outcomes for individuals. However, it is also interesting to examine the relationship between stress indicators and subjective well-being, or happiness. Are high levels of stress, as measured by available biomarkers, translating into low levels of happiness? Using 2008 data from the Health and Retirement Study, we examine this connection for a variety of measures.

The adverse consequences of a criminal record can be far-reaching. Access to the safety net is affected by criminal records, with 12 states placing strict restrictions on access to Temporary Assistance for Needy Families (TANF) or Supplemental Nutrition Assistance Program (SNAP) for people with felony convictions.

This chart shows how in the state of Washington, mortality rates are much higher immediately after released prisoners leave prison than before or afterward. 

The negative association of incarceration with earnings increases throughout adulthood. This chart shows that  individuals who were incarcerated at least once during the period 1979–2012 earn substantially less than those who were never incarcerated.

This chart shows that possession of a criminal record is found to decrease the probability of being called back for an interview for both white and black applicants

Criminal records constitute an important barrier to employment. This chart shows that criminal records are distributed unevenly across the population, with lower levels of education correlating with higher levels of incarceration. 

In the most recent study of recidivism, 77 percent of state prisoners who were released in 2005 had been arrested again by 2010. Recidivism is highest immediately after release: 43 percent of released prisoners are rearrested during the first year. By contrast, those who are not quickly rearrested are less likely to recidivate.

The disparate criminal justice experience of black Americans has played an important role in reform discussions. Differences in incarceration rates are stark.

This chart shows the types of crimes committed by prisoners in federal and state prison, and those who have reentered society and are now on parole. 

Our criminal justice system is predominantly state based, with states’ policy decisions affecting far more people than federal policy decisions. This complicates the analysis of the U.S. criminal justice system, given that states differ in terms of policy and experience of crime.

In 2012 the United States spent more than $265 billion ($845 per person) on criminal justice, including corrections, policing, and judicial expenses. States and local governments shoulder the largest share, totaling $213 billion.

Prison populations can increase when more people enter prison or when convicted prisoners receive longer sentences. These charts show how longer sentences have impacted state prison populations over time, as well as the how the type of crime committed impacts sentence length.

Over the past 30 years incarceration in the United States has increased to unprecedented levels, with about 2.25 million Americans held in local jails or in state and federal prisons in 2014.

These figures show the economic returns to noncognitive and cognitive skills as measured by increases in earnings as well as the probability of full-time employment. 

These charts show the relationship between cognitive skills or noncognitive skills and average median earnings for individuals ages 35 to 48, and that individuals with high levels of cognitive skills tend also to possess high levels of noncognitive skills.

This chart shows the importance of service tasks, social skill tasks, math tasks (nonroutine analytic reasoning), and routine tasks relative to their importance in the 1980 labor market. These trends reflect changes in the mix of occupations that make up the labor market over the past three decades.

Teachers who improve noncognitive skills confer large benefits on their students. This chart shows that a teacher’s ability to improve noncognitive skills has more effect on graduation rates than does her ability to raise test scores.

Rigorous evidence from studies of random assignment to high-quality preschool suggests that early childhood policy interventions have wide-ranging long-term impacts. This chart shows that preschool interventions emphasizing cognitive and noncognitive skill development have long-term economic benefits for participants.

Like cognitive skills, noncognitive skills can be developed, nurtured, and taught. This chart shows that targeted noncognitive skill development interventions improve student achievement and reduce behavior-related problems.

Noncognitive skills include factors that predict college readiness and completion—including resilience, persistence, and self-control —that are also consequential for the labor market. This chart shows that individuals in the bottom quartile of noncognitive skills are only about one-third as likely to complete a postsecondary degree as are individuals in the top quartile.

The relative price of housing varies by region; over the past three decades, households in the Northeast and West have experienced rising housing prices relative to other goods, while the opposite is true for households in the Midwest and South.

Over the past three decades, the price of health care has increased dramatically relative to overall prices while the price of clothing has fallen. 

Beginning February 2016, The Hamilton Project introduces an additional methodology to calculate the jobs gap. Specifically, we add a new jobs gap measure that calculates the number of jobs needed to reach the pre-recession unemployment rate after allowing for demographic shifts and changes in labor force participation, which has been gradually falling for more than a decade. 

In 2013 approximately 80 percent of households with health insurance through an employer faced an average annual (family) deductible of roughly $2,500 for non-preventive care. One in five households did not have enough cash on hand to pay a smaller deductible of $1,000.

For much of the past five decades, growth in spending on health care has been faster than economic growth in the economy as a whole. As shown in this chart, healthcare expenditures in 2014 accounted for an estimated 18 percent of GDP—a marked increase from 6 percent of GDP in 1965. 

This chart shows Medicare spending for the average enrollee in the program after adjusting for prices and demographics for each hospital referral region—areas where people tend to receive medical care from similar providers.

Over the past two decades, there has been a nearly 50 percent increase in the share of private sector workers who are offered a choice of health insurance plans.

Over the past three decades the percent of American workers enrolled in conventional health insurance plans has declined from 73 percent to less than 1 percent.

Several studies find that consumers spend more on health insurance and prescription drug plans than they need to by choosing a plan that is not well-aligned with their needs. 

In 2014, nearly 60 percent of Americans' tax-preferred retirement savings were held in either IRAs or defined-contribution plans, and only 13 percent were held in private sector traditional pensions (i.e., defined-benefit plans).

This chart presents one widely used measure of financial literacy: the ability to correctly answer three questions about compound interest, inflation, and risk diversification. Fewer than half of Americans can accurately answer these questions.

Half of all Americans turning 65 in 2015 will eventually face out-of-pocket expenditures on long-term services and supports (LTSS)—services provided in nursing homes, adult day-care centers, or in people’s homes that support those who have difficulty with routine daily activities such as bathing or dressing. 

Rising life expectancy and potentially exorbitant long-term care costs have increased the financial resources required to support oneself and one’s spouse in retirement and old age.  

In 2014 approximately half of nonretired Americans reported being confident that they will have enough money to live comfortably in retirement. 

Federal taxes, which are constant across states, amount to 18.4 cents per gallon—of which 15.44 cents go to the highway portion of the Highway Trust Fund (HTF), 2.86 cents to the mass transit portion of the HTF, and 0.1 cent to maintaining underground storage tanks). State taxes on gasoline vary considerably.

Of the more than 1,800 mass transit systems in the United States—including those running trains, buses, or other transport modes—roughly 2 percent reported that fare revenue exceeded operating expenses in 2013. 

The Highway Trust Fund (HTF), established by the Federal-Aid Highway Act of 1956, was the first dedicated funding source for highway construction and maintenance. For most of its history, the HTF was well in the black. Over the past fifteen years, however, expenditures have routinely exceeded revenues.

Public infrastructure spending from all levels of government totaled $416 billion in 2014—$41 billion (9 percent) less than its peak of $457 billion in 2003.

Over the period 1990 to 2013, the real earnings of individuals with lower levels of education have tended to decline, while they have risen for those with at least a bachelor’s degree. 

A full-time secondary earner in a low- or middle-income family takes home less than 50 percent of his or her earnings.

A substantial share of American workers must obtain a license from a state or local government to work in their professions. The share of workers nationwide required to have a license has risen dramatically since the 1950s, from just 5 percent to nearly 30 percent in 2008. This chart shows the share of the workforce that is licensed in every state based on estimates from a Harris poll conducted in the first half of 2013.

Each month, The Hamilton Project calculates America’s “jobs gap,” or the number of jobs that the U.S. economy needs to create in order to return to pre-recession employment levels while accounting for changes in the population. In this chart, The Hamilton Project applies the same jobs gap methodology to earlier recessions in 1981–82, 1990–91, 2001, and 2007–09.

The cost of computing has fallen spectacularly since the 1980s, creating a strong incentive for employers to substitute cheap technology for expensive labor. 

Graduates of majors with initially low earnings experience faster earnings growth during the early-career years.

The price that households pay for water is highly variable across cities, even when controlling for the volume of water that different households use.

There is considerable regional variation in per capita domestic water use, which includes indoor uses (e.g., drinking, flushing toilets, preparing food, showering, and washing clothes and dishes) as well as outdoor uses (e.g., watering lawns and gardens and washing cars).

Almost 40 percent of California's freshwater withdrawals are used for the production of fruits, nuts, and alfalfa.

The fastest growing area of the country receives the least precipitation.

Solutions to the country’s growing water challenges lie, in part, with the development and adoption of new innovative technologies. Yet, in comparison to the clean energy sector, innovation in the water sector has remained low. Using the numbers of patents filed in clean energy and water purification as indicators, the clean energy sector has exhibited a much higher rate of innovation over the past decade.

The U.S. fishing industry contributed approximately $90 billion to the economy in 2012. This contribution is split between commercial and recreational fishing—$59.0 billion and $30.4 billion, respectively.

Since about 1980, the growth of single-parent families has been driven almost entirely by an increase in childbearing outside of marriage, often the result of people sliding into relationships and having an unplanned baby.

The U.S. minimum wage now stands at 38 percent of the median wage, the third-lowest among OECD countries.

This chart presents the schedule for the Earned Income Tax Credit (EITC) for tax year 2014 and possible adjustments to maximize the impact.

This state-by-state map highlights the ratio of median out-of-pocket child-care costs to median earnings of single mothers with children under age five.

The United States does not currently invest heavily in vocational training compared with other countries, and funding for vocational training has declined over the past decades. The United States spends less than 0.05 percent of its gross domestic product on vocational training opportunities for workers.

This chart illustrates the cumulative risk of imprisonment for parents—or the projected lifetime likelihood of having served time for a person born in a specific year—by the time their child turns fourteen, by child's race and their own educational attainment. Regardless of race, fathers are much more likely to have been imprisoned than are mothers.

For certain demographic groups, incarceration has become a fact of life. There is nearly a 70 percent chance that an African American man without a high school diploma will have been imprisoned by his mid-thirties.

The United States is an international outlier when it comes to incarceration rates. The U.S. incarceration rate—defined as the number of inmates in local jails, state prisons, federal prisons, and privately operated facilities per every 100,000 U.S. residents—is more than six times that of the typical Organisation for Economic Co-Operation and Development (OECD) country.

The incarceration rate in the United States—defined as the number of inmates in local jails, state prisons, federal prisons, and privately operated facilities per every 100,000 U.S. residents—increased during the past three decades, from 220 in 1980 to 756 in 2008, before retreating slightly to 710 in 2012.

This chart shows the share of workers earning equal to or less than 150 percent of the minimum wage in every state in 2012. By hovering over a state, you can also see the minimum wage in 2012 in each state.

Why is the job-finding rate so low? The basic reason is that job openings remain depressed and there are a lot of unemployed workers competing for those jobs. The number of job openings fell by more than 40 percent between 2007 and 2009 and is almost 15 percent lower between 2007 and 2013.

It has always been harder to find work the longer you are unemployed, but the situation facing today’s workers is exceptional. No matter how long a worker has been unemployed, the odds that they find a job are far lower than before the Great Recession. Figure 1 shows the likelihood of finding a job as measured in the monthly Current Population Survey data.

This figure shows how SNAP has historically tracked rates of unemployment and economic downturns closely (denoted by the teal dotted line and gray bars, respectively). SNAP participation rates (as seen in the shaded blue area) are expected to fall as the economy continues to recover, as would be expected based on the pattern observed in previous recessions.

This figure compares the level of a household’s spending on food to the TFP level for its family size using data from the Consumer Expenditure Surveys from 1989 through 2011.

SNAP benefits are an effective tool for mitigating food insecurity since they increase a family’s ability to purchase food. Hunger in the United States spiked both during and after the Great Recession. In 2012 over 14 percent of all households were food insecure at some point throughout the year. Furthermore, 20 percent of households with children experienced food insecurity.

Household composition of families in the struggling lower-middle class varies substantially from the household composition of families in poverty. The composition of the struggling lower-middle class—defined here as working-age families with children under age eighteen whose income places them between 100 and 250 percent of the FPL—is markedly different from families in poverty in terms of marriage and presence of earners.

This figure displays the percentage of income generated by the addition of a secondary earner’s income that a family takes home after accounting for payroll and federal income taxes, SNAP benefits, and the cost of child care. 

Nearly one out of two families in the struggling lower-middle class is headed by an adult who has attended college. Among household family heads with income between 100 and 250 percent of the FPL, 48 percent have attended some college, and 14 percent have a bachelor’s degree or higher. In stark contrast to those living at or below 250 percent of the FPL, 77 percent of household family heads above 250 percent of the FPL attended at least some college, and about half have a bachelor’s degree or higher.

As shown in this chart, marginal tax rates are highest for those families with income at or above the FPL.

More than half of America’s working-age families with children under age eighteen (approximately 20.1 million families) have annual incomes of $60,000 or below. This is true whether we consider only earned wages and salary, or if we use a broader definition of pretax, pretransfer income, which also includes some unearned sources of income, such as investment income and alimony payments.

In a new chart, The Hamilton Project shows the child food insecurity rates in every state in 2011.

The most competitive colleges cost the least for low-income students while providing the most instructional expenditure per student. The most competitive colleges spend over $25,000 on instructional expenditure for each student yet the average low- income family pays less than $8,000 out of pocket for these schools. At the least selective four year colleges, low-income families pay over $15,000 out of pocket yet their students receive only around $5000 in instructional expenditure.

Only a small fraction of high-achieving, low-income students apply to schools where their achievement is similar to that of their fellow student.

Despite rising tuition costs and increased student debt burden, the rate of return of investing in a college education is still much higher than other conventional investments. The average rates of return of receiving an associate’s, bachelor’s, or professional degree are all over nine percentage points higher than the average returns from investing in stocks.

The earnings of college graduates are much higher than for nongraduates, and that is especially true among people born into low-income families. As the figure shows, without a college degree a child born into a family in the lowest quintile has a 45 percent change of remaining in that quintile as an adult and only a 5 percent chance of moving into the highest quintile. 

The gap between high- and low-income groups in college outcomes extends beyond college graduation rates. This figure demonstrates that the most-competitive colleges are attended almost entirely by students from higher-socioeconomic status households. 

One significant consequence of growing income inequality is that, by historical standards, high-income households are spending much more on their children’s education than low-income households. This figure shows enrichment expenditures—SAT prep, private tutors, computers, music lessons, and the like—by income level. 

While social mobility and economic opportunity are important aspects of the American ethos, the data suggest they are more myth than reality. In fact, a child’s family income plays a dominant role in determining his or her future income, and those who start out poor are likely to remain poor. This figure shows the chances that a child’s future earnings will place him in the lowest the or the highest quintile depending on where his parents fell in the distribution (from left to right on the figure, the lowest, middle, and highest quintiles). 

Many are concerned that rising income inequality will lead to declining social mobility. This figure, recently coined “The Great Gatsby Curve,” takes data from several countries at a single point in time to show the relationship between inequality and immobility. 

Before allowing this sticker price of college be a deterrent to pursuing higher education, students must look deeper to learn whether those costs apply to them. Looking at net tuition—the price that the average student actually pays after financial aid—the picture is very different.

While the private sector has added jobs to the economy in every month since March 2010, a total increase of approximately 6.8 million jobs through April 2013, the public sector has contracted. This figure shows the ratio of government employment to the civilian non-institutional population going back to 1980. For the twenty years prior to the Great Recession, this ratio stayed relatively constant, but since then it has dropped precipitously (except for the temporary uptick in 2010 when government employment rose to accommodate demand for U.S. Census workers). 

Many workers can benefit substantially from worker training programs, which provide education and skill development that lead to increased economic opportunities and better jobs. Students who earn two-year degrees in a high-return field, four-year degrees after a two-year degree, or certain career-oriented certificates, earn median salaries of $34,000 or more per year. Students who earn two-year degrees in low-return fields or who do not complete their programs earn around 33 percent less. 

The U.S. personal saving rate has declined dramatically over the past several decades and is currently very low by historical standards. Americans saved about 4 percent of after-tax personal income in 2012, down from average saving rates of 5.5 percent in the 1990s, 8.6 percent in the 1980s, and 9.6 percent in the 1970s. 

The Budget Control Act of 2011 (BCA) legislated $500 billion of cuts to the national defense budget over the next ten years—an abrupt change that could weaken the Department of Defense (DoD) if the cuts are not distributed efficiently. However, as this graph demonstrates, sudden and significant changes to defense spending are not new challenges. 

Over the next ten years, approximately $4 trillion of deficit reduction are set to take place through the Budget Control Act of 2011 (BCA) the American Taxpayer Relief Act of 2012 (ATRA) and the sequestration, which went into effect on March 1, 2013. This graph, from the introduction of The Hamilton Project’s 15 Ways to Rethink the Federal Budget shows how these policies are projected to affect the debt-to-GDP ratio over the next decade. 

This figure shows the effects of the recent budget changes, including the sequester, on non-defense discretionary spending. Under these cuts this category of spending would fall to its lowest level in recent history. 

According to the official poverty measure calculated by the U.S. Census Bureau, prior to the start of the recession in 2007, the poverty rate was only slightly below its 1980 level, and has since climbed to the highest level in over thirty years. Many economists, however, advocate using an alternative measure of poverty, developed by the National Academy of Sciences (NAS) in the 1990s. This figure compares the two measurements.

While the last-minute fiscal-cliff legislation left much to be desired, it managed to avert most of the near-term drag on the economy that would have occurred in the absence of an agreement as well as enact deficit reduction of $700 billion over the next 10 years. This represents a 7 percent decrease in the expected $10 trillion increase in the national debt over the next decade.

The announcement by the Federal Reserve Board that it will not increase the interest rate until the unemployment rate falls below 6.5 percent raises the question of when we will reach this unemployment level. If the job-creation rate holds at last year’s pace, we will reach the Fed’s benchmark in about two and a half years.

Millions of Americans lost their jobs during the recession, and even though the economy has been recovering for several years, it is still more difficult for unemployed individuals to find a job now than it was before the recession. One way to observe this is to measure how many unemployed Americans there are per job opening. As this graph shows, although we have come down from the height of the recession—when there were more than six unemployed people per job opening—we still have not reached pre-recession employment levels.

Many believe that wages have stagnated over the last four decades, while in fact, they have fallen. Although the wages of working men have remained roughly unchanged since 1970, when we include those who are unemployed, incarcerated, or living on Social Security benefits, the average wage has actually fallen by 19 percent over this period. 

College education has historically driven increases in labor productivity, which in turn lead to wage growth. This same trend has emerged during the last 40 years. As women’s college-graduation rates jumped over 20 percentage points since 1970 , female workers’ wages increased by similarly high rates. 

Despite widespread claims that a college degree is no longer worth the rising price of tuition, a bachelor’s degree still has about the same return on investment today as it did in the 80s. College still pays for itself, and then some; it will earn you, on average, a 16 percent return, which is a higher rate of return than on investments in the stock market (6.8 percent), corporate bonds (2.9 percent), gold (2.3 percent), long-term government bonds (2.2 percent), or housing (0.4 percent).

The vast majority of the institutionalized population ages twenty-five to sixty-four are in prison (with the rest in nursing homes), and over the past four decades, the share of Americans without a high school diploma that has been institutionalized has nearly tripled, while the rate for college graduates has remained unchanged.

On average, charter schools perform no better than traditional public schools. Some, however, such as those in the Harlem Children’s Zone, have demonstrated a remarkable ability to improve student test scores. 

There is no single solution to the many problems facing America’s education system, but research has shown that many small-scale interventions offer the promise of bettering student outcomes. For instance, incentivizing students to read books has been shown to increase reading comprehension scores. 

While public education is the great equalizer in America, many students arrive at school less prepared and fall further behind during school, resulting in a society where opportunities are not equally shared. For example, the data show a clear achievement gap between black and white students that appears as early as kindergarten and grows with time. 

Education is one of the most important determinants of an individual’s earnings potential. For example, while almost 80 percent of high school dropouts made less than $30,000 in 2010, the cutoff for the 80th percentile among college graduates was around $100,000. 

Eliminating or limiting tax expenditures are commonly endorsed tax reform options. However, as with other approaches to raising taxes, the distributional consequences of reducing tax expenditures depend largely on which tax expenditures are eliminated. This chart presents the distributional consequences of eliminating each of the six largest individual tax expenditures.

Earnings have risen dramatically at the top since 1979—by more than 250 percent for households in the top 1 percent of the income distribution. At the same time, many households at the middle and bottom have experienced stagnating incomes or even declines in earnings. 

One of the primary reasons America’s tax revenues remain low relative to other industrialized countries is our use of special tax preferences, or “tax expenditures,” that provide individuals and businesses with opportunities to reduce their tax bills by undertaking certain actions. The magnitude of tax expenditures is comparable to the largest government spending programs; in total, they are about 8 percent of GDP.

This chart shows how different effective corporate tax rates translate into pretax profitability. Companies in high-tax industries, such as steel, trucking, or utilities, must earn more than $1.40 in before-tax profits, on average, to return $1 to investors. On the other hand, companies in low-tax industries, such as biotechnology and Internet services and software, need to earn less than $1.20.

This chart uses the economic evidence from twenty-three published studies cited in Chetty (2011) to illustrate how a 10 percent cut in individual income tax rates might increase the pretax earnings of the typical tax-paying family earning about $70,000 per year.

It is critical that worker training programs be rigorously evaluated so that scare training resources can be targeted toward the most effective programs.

Federal spending on job training programs by the U.S. Department of Labor has gradually fallen since the 1980s, aside from a bump in 2009 from the American Recovery and Reinvestment Act.

Retraining in technical fields provides higher returns for workers than retraining in non-technical classes.

Recent research suggests that hardship for dislocated workers extends beyond periods of unemployment. Once reemployed, workers typically earn significantly less than they did prior to job loss.

Over the last 35 years, the opportunity gap for children whose parents are at different ends of the earnings distribution has grown. Children at the 90th percentile of the distribution of family earnings have experienced a 45 percent increase, while children at the 25th percentile have experienced a decline of over 20 percent.

Students are more likely to respond to education incentives for certain inputs, such as reading books, than more general outputs, such as making good grades.

Over the last 40 years, the salary gap between teachers and nonteachers has grown by over $10,000.

Investments in education have narrowed the black-white skill gap for much of the twentieth century, but has stagnated since the 1980s.

The United States scores below the OCED average in mathematics, despite spending $3,000 more per student than the OCED average.

Over the last 30 years, math and reading test scores for high school seniors have barely moved.

While all states have lost jobs during the Great Recession, these losses have not been equally shared across the nation.

Technological and medical innovations have drastically reduced the mortality rate and increased life expectancy in the United States

The United States lags far behind other countries in training students in the STEM fields that advance scientific and technological innovations.

Since the advent of computers, consumers have enjoyed greater bang for their buck as computers have become increasingly powerful.

Median wages for the American family have increased over the last twenty-five years, but these incresase are largely due to additional hours worked.

Despite continued debate over the value of a college education, data shows that higher education has a much higher rate of return than any other investment.

In today’s economy, those young adults with a college degree are more likely to be employed and earn higher wages than their peers with a high school diploma only or less.

When energy sources are priced, including the social costs – environmental degregation and health risks, different winners and losers come out than when prices are simply those shown at the pump.

The map above shows counties designated “non-attainment” by the U.S. Environmental Protection Agency because their pollution concentrations of specific contaminants exceeded the National Ambient Air Quality Standards.

Earnings have declined nearly 28 percent for the median American male worker since 1969.

State and local governments provide most of the funding for critical infrastructure systems, but spending has declined over the last 50 years.

Despite increases in per-student education spending, high school and college completion rates have stagnated over the past 30 years.

In addition to the 14 million Americans officially counted as unemployed, there are over 11 million American workers who are underutilized, underemployed, or have given up seeking work.

In the aftermath of the Great Recession, the employment-to-population ratio remains 6 percentage points lower and income per person is largely unchanged from the beginning of the decade.

During the last four decades, U.S. corporate income tax has declined as a share of national income and total federal revenues.

College tuition and fees have risen dramatically during the last 30 years for public and private U.S. institutions and are projected to continue increasing.

In the 1970s and 1980s, the United States led the world in the share of the population that completed a college degree; by 2008 that lead had essentially vanished.

Employment of men with only high school diplomas has fallen considerably in recent years, especially when compared to employment of men with a college degree.

Today's out-of-work Americans are experiencing longer spells of unemployment than in any recent recession. In October 2010, half of all unemployed workers had been unemployed for more than 21 weeks.

Employment gaps created during the 1980-1982 recessions still remain today.

The hardest hit counties in the 1980-1982 recessions differed dramatically from the hardest hit counties in the Great Recession from 2007-2009.

The hardest hit counties during the 1980-1982 recessions experienced sharper per-capita income declines during the recessions, as well as slower growth following the national recovery.

In communities with large numbers of displaced workers, more-educated workers are more likely to move to a new city of country in search of employment than less-educated workers.

America is issuing a declining number of visas for high-skill workers.

The United States experienced two waves of immigration over the last century. The first peaked in 1910, while the second stemmed from immigration reform in 1965 and continues today.

Immigrants and the U.S.-born have similar fiscal footprints, paying more in taxes than they consume in services over their lifetime.

Immigration may have a modest positive effect on the average wage of U.S.-born workers.

Educational attainment of foreign-born workers in the American workforce varies widely.

Workers ages 16-24 experienced the most drastic drop in employment during the Great Recession of 2007-2009.

The fall in employment from the 2007-2009 Great Recession is the most severe fall during a recession since World War II.

In the past 40 years, as the pace of innovation has slowed, American workers have experienced lower growth rates of productivity and compensation.

Over the past three decades, the wages of college graduates — both men and women — have increased significantly more than the wages of less educated workers.

Over the past 30 years, employment has increased in low-skill and high-skill occupations while at the same time stagnating or decreasing in middle-skill occupations.

Federal debt as a percentage of GDP continues to grow in the aftermath of the Great Recession.

This figure from the 2010 Hamilton Project strategy paper "From Recession to Recovery to Renewal" illustrates changes in the male and female nonemployment to population ratio between 1945 and 2010.

Between 1975 and 2008, income inequality in the United States has risen, with households in the 95th percentile of income making disproportionate gains.

Three different GDP growth scenarios show potential growth scenarios for the next twenty years.

A study on Baltimore public schools shows that socio-economic status impacts academic achievement during the summer months.