Federal Reserve Chair Janet Yellen said economic mobility strengthens the economy and more research is needed on factors that influence it, including how families affect future prosperity and how public policy can help offer the most opportunity.
“Researchers and policy makers need a better understanding of how much mobility individuals may experience over the course of their lives,” Yellen said Thursday in remarks prepared for delivery to a Fed conference on economic mobility in Washington. “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.”
Greater economic opportunity and mobility promote a “healthier economy” and entrepreneurship and innovation are key contributors to individual mobility as well as to a strong economy, Yellen said. More research would help economists better understand how much mobility at the individual level matters for broader economic growth, she said.
As central bank policy makers prepare to raise interest rates for the first time since June 2006, Yellen also has used her first year as Fed chief to advocate for those hurt most by the longest and deepest recession since the Great Depression. Yellen told a Boston Fed conference on inequality in October that she’s “greatly” concerned by a sustained rise in U.S. income and wealth inequality.
Yellen did not address her outlook for the economy or monetary policy in the text of her prepared remarks.
After being criticized for discussing a Democratic Party-championed issue before the November elections, Yellen cited a Pew Research Center report showing that in the U.S. about 80 percent of Americans “across the ideological spectrum see inequality as a moderately big or very big problem.”
She also described the Fed’s Survey of Consumer Finances, from which she pulled data for her October speech, as “a rich source of data for researchers in this field.”
In March 2014 she used one of her first public appearances as chair to say the economy may need stimulus for “some time” and that the central bank hasn’t done enough to combat unemployment even after holding interest rates near zero since December 2008 and quadrupling its balance sheet.
Yellen’s comments Thursday opened a two-day Fed-sponsored conference. The gathering will include sessions on intergenerational economic mobility and the impact of families and communities. Fed Governor Lael Brainard, St. Louis Fed President James Bullard and Minneapolis Fed chief Narayana Kocherlakota also are scheduled to speak.
Yellen, 68, was a labor-market economist and professor at the University of California at Berkeley before joining the Fed. She served as San Francisco Fed president and Fed vice chair before she was sworn in as chair in February 2014.