Measuring the Middle Class

– October 4, 2016

What do we mean by “middle class,” and how many people are in it?


How Teachers are Graded

– September 22, 2016

Teachers matter. Primary and secondary education is one of the most important human capital investments Americans will ever make, and teachers are crucial in the quality of that education. But how do we measure teacher effectiveness, and exactly how much do teachers affect their students’ long-term future?


Small Businesses Leverage Their Size

– July 5, 2016

Small businesses are an important part of our economy and communities, but often we incorrectly assume that their small size is necessarily a competitive disadvantage. Numerous articles have proclaimed the end of Main Street, arguing that “mom and pop” shops cannot compete with the low prices and one-stop shopping of big-box chains. Others have touted the benefits of small business to local economies, emphasizing our duty to support small firms in our communities. In both lines of discussion, small businesses are seen as passive entities, handicapped by their size in our large and increasingly global economy.


An Inflation Primer

– May 31, 2016

What is inflation? What comes to mind when you think of inflation? It might be higher prices, less affordability, and something bad that we want to avoid. Yet more expensive goods, which would be seen as a negative for consumers, can be a plus for sellers, as they can charge higher prices.


What Are the Best Job Destinations for College Grads?

– May 10, 2016

As job hunting follows years of preparation involving college essays, acceptance letters, sophomore slump, internships, finals, and commencement, the question on every new graduate’s mind is: Where do I go from here? AIER’s Employment Destinations Index aims to help college graduates and young professionals as they make the pivotal life decision of where to call home.


Reforming Social Security

– April 4, 2016

Since its enactment in 1935, Social Security has become an important feature of the retirement landscape for all Americans. But its finances are in need of repair. Despite the significant taxes already paid into the Social Security system, future benefit payments are expected to both outrun future tax revenues and consume any accumulated surplus (Chart 1). 


A Drop in Job-Related Moves Suggests a More Efficient Economy

– March 1, 2016

Internal migration has always been an important feature of the United States labor market. The ability to move between labor markets to find work or a better job can help promote national economic growth and protect people from downturns in their local economy. But people today—regardless of their age or marital status—are moving far less often than they did in the 1980s and 1990s. Our research shows that overall, internal migration rates in 2015 were half of what they had been in the 1980s. As many as 10 million fewer Americans are moving each year than moved 30 years ago.


Average American’s Cost of Living Falls

– February 1, 2016

With energy prices and a strong dollar keeping inflation low, the average American’s cost of living did not rise in 2015 and in fact fell relative to wages. As this research brief shows, however, some Americans are spending large amounts on services such as education and health care and have seen their cost of living continue to rise. 


Revising AIER’s Business-Cycle Conditions Model

– December 28, 2015

It’s been said that the only constant in life is change. That idea certainly holds true for economies. Research at AIER is based on sound economic theory and backed by empirical analysis. The same combination of theory and empirical study is the foundation of our Business-Cycle Conditions model. In simple terms, our model is a set of economic indicators combined in a way that anticipates turning points in a business cycle. We stress that our use of the statistical indicators is only one of the tools available to help forecast the near-future, cyclical trend of business activity.


How to Formulate a Retirement Spending Plan

– December 8, 2015

As you approach retirement, you’ll likely spend countless hours thinking about how and where to invest after you stop working. Should you get more conservative with your investments? What amount of risk can you tolerate at this stage of life? Should you buy an annuity? These are all important questions about how to finance retirement, but they ignore a critical component of success: How should you withdraw your money from savings? 


Top College Destinations Offer a Full Life Off Campus

– November 20, 2015

AIER’s annual College Destinations Index analyzes 269 urban areas around the country and ranks them as college destinations based on two categories: the quality of student life and opportunities to prepare for the world of work. Just as the college experience is different at small liberal arts colleges and large state universities, off-campus life offers different experiences in small and large cities. We sorted urban areas by size and analyzed 11 attributes in two categories (Table 1). We learned that in the large and midsize metro areas, most of our highest-ranking places—regardless of city size—earned their spot because of their prep-for-work opportunities. Most of our highest-ranking small cities and college towns earned their rankings for their social and cultural offerings that enhance the quality of student life. 


Expect No Cost-of-Living Adjustment to Social Security in 2016

– October 6, 2015

The annual cost-of-living adjustment (COLA) will be announced on Oct. 15, when the last data required to compute it becomes available. But the data already suggest that prices have fallen over the past 12 months, removing the need for an adjustment. If prices have fallen but the COLA is zero, the purchasing power of Social Security benefits would increase.