Fed's Yellen Sees Education as Key to Breaking Poverty Trap

  • Opens community development research conference with remarks
  • Does not speak on economy or monetary policy in speech text

Federal Reserve Chair Janet Yellen said new research shows policy makers should focus on long-term strategies for helping children, especially those in poverty, prepare for success in the labor market.

A fundamental question is figuring out how to help those “who were not born into families with socioeconomic advantages,” Yellen said at a conference in Washington on Thursday.

There is value in “starting young to develop basic work habits and skills, like literacy, numeracy and interpersonal and organizational skills,” said Yellen, who did not comment on monetary policy or the economic outlook in her remarks.

U.S. central bankers have stressed in recent months that monetary policy can do little to spur a faster economic expansion in the face of demographic changes and low productivity. Yellen and her colleagues have said other policy makers should concentrate, in part, on better education and workforce development if they wish to see stronger growth.

“We should also pay attention to how well young people form the sorts of soft skills --things like teamwork, communication and the ability to handle conflict -- that are so valued by employers,” she said. “Research presented over the next two days makes a compelling case that there is a need to also think longer term about how to prepare people for success in the labor market.”

Yellen’s remarks opened the 10th Federal Reserve System Community Development Research Conference, which will also feature remarks from Minneapolis Fed President Neel Kashkari later on Thursday and from Chicago Fed chief Charles Evans on Friday. The Fed runs the conference every other year.

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