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OECD Economic Surveys: United States 2007

image of OECD Economic Surveys: United States 2007
This edition of OECD's periodic survey of the US economy assesses recent economic developments and examines challenges the US faces including employment limits that are slowing economic growth, fiscal sustainability, household debt, improving primary and secondary education, and financing higher education. This book includes StatLinks, URLs under tables and graphs linking to Excel® spreadsheet files containing the underlying data.

"Has an international bureaucracy ever made so much sense in so few words? If so, I missed it."-Greg Mankiw

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Potential employment

The trend growth rate of GDP has slowed, mainly because of tighter limits on how quickly employment can grow. In particular, the labour force participation rate, which used to be rising quickly, is now trending down. Against this background, this chapter considers three policies that bear on long-term employment trends. Raising the age at which workers become eligible for full social security benefits would discourage premature retirement and make the social security system more financially secure. The disability insurance system is discouraging a rising share of the population from staying in the workforce and should be made less generous and more selective. Substantial increases in the federal minimum wage are planned; however, increases in the Earned Income Tax Credit would achieve the same objectives more effectively and with less risk of job losses.

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