Bernanke: Education Can Drive Productivity Growth
More education for U.S. workers of all ages could help slow an anticipated moderation of productivity growth as the population ages, Federal Reserve Chairman Ben Bernanke said on Monday.
The U.S. workforce will increase more slowly and is likely to be less experienced on average as people born in the 1960s and 1970s replace the "baby boom" generation ranging in age from the late 40s to the early 60s, Bernanke said in remarks prepared for delivery to the U.S. Chamber of Commerce.
Bernanke did address the current economic situation or the near-term outlook for the economy or interest rates in his speech.
The graying of the U.S. population means higher levels of education are necessary to sustain productivity growth, he said.
"The slower expansion of the labor force, all else equal, implies slower growth of potential output," Bernanke said.
"More schooling for more of the workforce could help cushion the impact of this demographic transition on economic growth by boosting productivity growth."
Advances in productivity are key to improving the U.S. standard of living, Bernanke said.
Continuing advances in technology put a premium on education, the Fed chairman said. Use of information technology in health care and other service sectors is likely to pick up, he added.
The ability of the U.S. economy to benefit from globalization and adapt to changes from globalization also depends on education, Bernanke said.
"Our ability to reap the benefits of globalization will depend on the flexibility of our labor force to adapt to changes in job opportunities, in part by investing in the education and training necessary to meet the new demands," he said.