Essentially unemployed: Potential implications of the COVID-19 crisis on wage inequality

Arbeitspapier

The aim of this paper is to determine how wage inequality is likely to be affected by the current COVID-19 pandemic. I first estimate the impact that social distancing will have on US state-level employment using pre-crisis industry data. I then consider the joint impact of states' unemployment benefit programs and the federal CARES Act on national inequality using representative sampling and Markov-Chain-Monte-Carlo estimations. I find that while wage inequality is likely to improve in the short-run with the added federal subsidy, allowing this support to expire prematurely will result in a worsening of pre-crisis wage inequality.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2020-06

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Macroeconomics: Consumption, Saving, Production, Employment, and Investment: Forecasting and Simulation: Models and Applications ; Statistical Simulation Methods: General
• Subject: Wage inequality ; unemployment ; COVID-19 ; Markov-Chain-Monte-Carlo ; Gibbs sampling ; structuralist method

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Schiavone, Ansel
• Event: Veröffentlichung
• (who): The University of Utah, Department of Economics
• (where): Salt Lake City, UT
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/261020
• Last update: 10.03.2025, 11:41 AM CET