Workers without college degrees are being left behind. Since the 1980s, the gap between those at the top of the income spectrum and everyone else has been widening, due to a number of phenomena, including increased competition from China, the decline of the coal industry, and automation. These seismic changes have laid bare the shortcomings of the American welfare state, which can help workers absorb short term job loss but leaves them in a precarious state for longer term unemployment.
Solving this problem will require new ways of thinking and a better understanding of how global economic forces affect local economies. That has been the focus of Gordon Hanson, Peter Wertheim Professor of Urban Policy at Harvard Kennedy School. Professor Hanson says that the economic consensus in the 1980s and 1990s, which assumed that free trade would lead to massive growth for everyone, was wildly optimistic. To address regional economic divides, Professor Hanson says policymakers will have to consider approaches that would have once been thought too economically intrusive.
In collaboration with HKS Professor Dani Rodrik, Professor Hanson has recently launched Reimagining the Economy, a project focused on solving these problems. You can read more about it at hks.harvard.edu/centers/wiener/programs/economy.
Some of Professor Hanson's work on "The China Shock" and labor markets can be read here:
"The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade"
with David H. Autor and David Dorn
www.nber.org/p...
"On the Persistance of the China Shock"
with David H Autor and David Dorn
www.nber.org/p...
This video mentions cites research by Enrico Moretti and Patrick M. Kline, which can be viewed at nber.org/papers/w19293.
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