Improvements in the quality of workers due to changes in the distribution of education and work experience are among the key determinants of the economy’s potential rate of growth. The rate of such improvements is thus of substantial interest to monetary and fiscal policymakers concerned with maintaining balance between aggregate supply and demand. It also is of importance to officials charged with planning the future of programs such as Social Security, whose projected financial condition is highly sensitive to assumptions about long-term economic growth.
Chicago Fed Letter, No. 174, February 2002
Growth in Worker Quality