Fed chief seeks studies on economic mobility

Federal Reserve Chairwoman Janet Yellen called Thursday for policymakers to research economic mobility, saying that more data is needed to determine which policies will best help Americans climb the ladder.

Speaking at a forum in Washington sponsored by the Federal Reserve, Yellen posed a series of questions to economists, challenging them to examine how family structures and geographical location influence someone’s ability to enter a higher class.

{mosads}”Research may be able to provide evidence on which public policies are most helpful in building an economy in which people are poised to get ahead,” she said. “It would also be beneficial to understand whether any policies may hold people back or discourage upward mobility.”

Yellen is addressing economic inequality at a time when it has become an important policy discussion in both parties following the 2008 financial crisis. President Obama framed his entire State of the Union address earlier this year around “middle-class economics.”

Yellen said that “families are the locus of both opportunities and barriers to economic mobility.”

“There are important research questions to be tackled here. What individual or family characteristics may predict who will achieve upward mobility? How much does someone’s initial circumstances in life influence how far that person can get or how hard he or she needs to work to get there?” Yellen asked.

She said that “researchers and policymakers need a better understanding of how much mobility individuals may experience over the course of their lives and at what age people’s outcomes may become more difficult to change.”

Yellen said that “economists do not fully understand how locational differences affect economic mobility or the complex relationship between economic mobility and geographic mobility.”