I think a lot of the declines in the participation rate are, in fact, demographic or structural, reflecting sociological trends. Many of the changes that we're seeing now we were also seeing to some degree even before the crisis. And we have a number of staffers here at the Fed who have studied participation rates and the like. So I think a lot of the unemployment decline that we've seen -- contrary to sometimes what you hear -- I think a lot of it really does come from jobs as opposed to declining participation. That being said, there certainly is a portion of the decline in participation which is related to people dropping out of the labor force because they are discouraged, because their skills have become obsolete, because they've lost attachment to the labor force, and so on. The Fed can address that, to some extent. If -- you know, if we're able to get the economy closer to full employment, then some people who are discouraged or who have been unemployed for a long time might find they have opportunities to rejoin the labor market. But I think fundamentally that training our workforce to fit the needs of 21st century industry in the world that we have today is the job of both the private educational sector and the government educational sector. We have many strengths in our educational sector, including outstanding universities, but we have a lot of weaknesses, as you know. There are many, many factors that affect participation, employment, wages, and so on, but the one I think that we can most directly affect is the skill level of our workforce. And that doesn't mean everybody has to go to get a Ph.D. People have different needs, different interests. But that, I think, is one of the biggest challenges that our society faces. And if we don't address it, then we're going to see a larger and larger number of people who are either unemployed, underemployed, or working at very low wages, which obviously is not something we want to -- we want to see.

In fact, I am the poster child for first-generation college students. My parents had the opportunity to attend school only through the fifth grade in Italy. They moved our family from Italy to Akron when I was 5 years old because they knew that their children would have better educational opportunities in America. Even then, it was not a given that I would go to college—good Italian girls at that time often did not earn much more than a high school degree, and they certainly did not move away from home at age 18 to go to college! But I was fortunate to have support from my family and I had the University of Akron in my backyard. I enrolled right after high school, majored in economics, and never looked back.

Now, although policymakers have the primary responsibility for effectively communicating their decisions, the task becomes easier when the general public has a basic grasp of economic and financial principles. Everyone benefits from a better public understanding of basic economic concepts. It helps policymakers in their efforts to successfully convey policy decisions, and it allows voters to more effectively hold policymakers accountable.

Now, although policymakers have the primary responsibility for effectively communicating their decisions, the task becomes easier when the general public has a basic grasp of economic and financial principles. Everyone benefits from a better public understanding of basic economic concepts. It helps policymakers in their efforts to successfully convey policy decisions, and it allows voters to more effectively hold policymakers accountable.

Comprehensive, effective regulation of consumer products is the first step in ensuring positive outcomes for consumers. But consumers must also be equipped with the necessary quantitative and decisionmaking tools, and supported with the right information at the right time in order to make the best possible choices.

In general, higher education is one of the strong points of the U.S. educational system.  We must work diligently to maintain the quality of our educational system where it is strong and strive to improve it where it is not.  In particular, we must find ways to move more of our students, especially minorities and those from disadvantaged backgrounds, into education after high school.   

U.S. companies are ready to meet the world’s growing demand for services—but we will face competition. Staying ahead in
services trade requires well-educated workers and adroit managers; developing more of them will be key to selling our services to the world. Every chance I get, I stress the importance of education to good jobs and rising incomes in this country.

Education fundamentally supports advances in productivity, upon which our ability to generate continuing improvement in our standard of living depends.   

In the diverse Southeast economy—with the pressure of globalization and technological change—the required skill set will change constantly. We hear often that a person who will spend 40 years in the labor force may have not only multiple jobs but also three or four distinct careers. For many, personal retooling is not just a choice—it's a matter of survival. Fortunately, state leaders are well positioned to ease this sometimes painful process by investing in programs to foster worker retooling.

 ...  [M]y position is that if government is going to invest in education at all, it should invest in enhancing early childhood development. For me, this is an economic growth issue. The continual enhancement of skills over time is essential to sustained growth in economic well-being, and research indicates that early childhood development is critical to the life-long development of skills.  

The fact that there are some very wealthy people doesn't necessarily make me or you worse off if they're creating value. You know, I'm a baseball fan. I like to watch Alex Rodriguez. And I don't particularly care that he earns a lot more money than I do.

But we do need to make sure that people throughout the income scale have opportunities to raise their own standards of living and make progress in our society.

And that's why I've advocated the principle of trying to give people opportunity through education, through skills, through support during periods of transition between jobs to make them more productive and more able to deal with the disruptions that come with a globalized economy.

Then as now, the principal path to opportunity is through education. As an economist, I am persuaded that a strong educational system--one that promotes lifetime learning and skill development--is a critical factor in our nation's prosperity. The economic importance of education will only increase as technology advances and as the global economy becomes increasingly integrated and complex.

Economists at our Bank have been studying this aspect of the economy for several years now. Recently, they have concluded that differences in state income levels over the past 75 years can be explained mostly by two factors: innovation and education. In simple terms, those states that enhance their knowledge base are the ones that are likely to prosper in the future.

[D]evoting resources to improving our K-12 education system, expanding access to community colleges, increasing on-the-job training, and stimulating basic research could augment the nation’s capital in the broadest sense of the term and might have desirable distributional effects as well.

With the ever-increasing pace of economic change, the old notion of getting out of high school or even college and having a job for the rest of your life is no longer a realistic expectation.  In today's world, education has to be viewed as a process of lifetime learning.  As a consequence, the nature of education is of necessity changing.  As I have often noted, community colleges, which largely tend to be focused on providing the education and training needed to move from one occupation to another, play an important role in this process.