Wealth, Income, and Employment Inequality
Paper Session
Friday, Jan. 5, 2024 2:30 PM - 4:30 PM (CST)
- Chair: Arik Levinson, U.S. Treasury
Granular Income Inequality and Mobility using IDDA: Exploring Patterns across Race and Ethnicity
Abstract
Earning power in the United States is significantly more unequal today than it was fifty years ago. Since 1980, the pace of earnings growth has been uneven, and varying, for Americans throughout the earnings distribution. The course of the widening earnings disparities has been well-documented, but there is still much we do not know about how earnings have changed for Americans over the last five decades of stubbornly rising inequality. The open questions are particularly acute at the subnational level. In our paper, we present a new data source that fills a number of important needs in this developing area of statistics. The major advantages of our approach are threefold: (i) our data include a wide range of statistics for subnational geographic areas (currently states) as well as many subnational and sub-state populations; (ii) we provide statistics on earnings mobility and volatility in addition to statistics on income distributions; and (iii) statistics in our data are computed directly from the universe of tax filers, which means we do not need to rely on statistical matching or projections to link micro and macro data sources. These data are the result of a collaboration between researchers at the U.S. Census Bureau and the Minneapolis Fed’s Opportunity & Inclusive Growth Institute. We plan to make the data publicly available by the time of the conference presentation so that they may serve as a new resource to researchers, interested policymakers, and the public at large. In addition to introducing these data, our conference paper will explore sample applications that demonstrate the usefulness of the data for exploring questions related to the evolution of income inequality within and across communities defined by race, ethnicity, and place, as well as other demographics.Estimating Structural Barriers to Work Using Beveridge Curves
Abstract
The U.S. unemployment rate sits at 3.5%. The rate has been at or below 4.0% for 16 consecutive months. A troubling observation is that the employment-population ratio has not returned to its pre-pandemic level. Given the Federal Reserve’s efforts to tackle inflation, the likelihood that the ratio returns to its pre-pandemic level is low. Job openings are trending downward. Why is this “cooling off” a concern? Research shows that strong economic conditions improve the absolute and relative income of “vulnerable” workers. Conversely, their economic outcomes are the first to deteriorate during a slowdown. The recovery and expansion provide an opportunity to quantify the ability of economic growth to improve the outcomes of “vulnerable” populations. The current period of growth also provides the opportunity to demonstrate that “structural” barriers to work remain quite significant even in the presence of strong growth. This paper has three goals. First, using micro data from the Current Population Survey, we document the post-pandemic labor market experiences of “vulnerable” groups: out-of-school young adults, adults with no more than a high school diploma, Black, Latino, American Indians and Alaska Natives, all women, with a focus on mothers, and people with a disability. Second, we estimate Beveridge Curves to identify which “vulnerable” groups face structural barriers and whether they diminished during the expansion. This will explain why the employment-population ratio, which depends on the unemployment rate has not returned to or surpassed its pre-pandemic level. Current findings indicate that the Beveridge Curves of mothers and out-of-school young adults remain elevated and have not returned to their pre-pandemic positions. Third, focusing on mental health, we identify the groups that experienced the greatest deterioration in mental health, the greatest changes in anxiety, and the contributions of the labor market, public health policies, and COVID-19 severity to their changes.Discussant(s)
Laura Feiveson
,
U.S. Treasury
Michael Stepner
,
University of Toronto
Paula Calvo
,
Arizona State University
JEL Classifications
- E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
- D6 - Welfare Economics