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of total employment in industries that are intensive users of informationtechnology was 41 percent. Projections by the Bureau of Labor Statistics suggestthat this figure will rise to 44 percent by 2006. Other projections indicatethat the five fastest growing occupations between now and 2008 will berelated to computers.This evolution of the labor market from one based on a strong back to onebased on a strong mind has both caused and been driven by substantialimprovements in educational attainment. The change in the education of thework force and the increasing value of education represent an important transformationof the labor market over the course of the century. A second importanttransformation has been an opening up of opportunities to women,minorities, and persons with disabilities. The typical adult female in 1900 wasworking at home or on the farm, and those women who worked for wages werelikely to be unmarried and in low-paying occupations. African Americans andother minorities were also generally limited in their occupational choices. Overthe course of the century, however, women and minorities entered the laborforce in increasing numbers and enjoyed expanded occupational choice, andtheir earnings have risen. All groups have made substantial improvements ineducational attainment and have shared in the greater wealth generated from theaccumulation of skills and higher productivity.This chapter analyzes these two key transformations of the labor market—the increasing value of education and the increasing opportunities forwomen, minorities, and persons with disabilities—and assesses the challengesthey pose for current policy. Although education has proved to be an avenuetoward higher earnings for all, a large gap has emerged between the wages ofthose with education beyond high school and the wages of those with lesseducation. The economy has changed in a way that places a high premiumon certain skills, some of them unknown only a few years ago, and workerswithout those skills are increasingly likely to be left behind. This wage premiumprovides a strong market signal about the value of education, but evidencesuggests that many workers lack the skills needed for today’s jobs.Therefore government policies have a role to play. Governments at all levelshave traditionally been involved in providing education, in part because ofthe social as well as economic benefits associated with it. The last part of thischapter examines the role of government and, more specifically, the initiativesput forth by this Administration to improve the quantity and quality ofeducation and training of the American work force and provide new opportunitiesfor American workers. The challenge for public policy in the 21stcentury will be to develop an appropriate set of education and training policies,one that creates a framework of lifetime learning within which workerscan acquire and maintain both the basic skills and the more technical skillsthey need in the new labor market.Chapter 4 | 131