Who's at Risk? Effects of Inflation on Unemployment Risk

Hie Joo Ahn and Lam Nguyen

Papers from arXiv.org

Abstract: We empirically investigate the distributional effects of inflation on workers' unemployment tail risks using instrumental variable quantile regression. We find that supply-driven inflation disproportionately raises unemployment tail risks for cyclically vulnerable workers in both the short and medium term, while demand-driven inflation has differential effects -- limited to race and reason for unemployment -- only in the medium term. Demand-boosting policies, including monetary policy, can inadvertently widen those disparities through the inflation channel, underscoring the importance of inflation stabilization in promoting equitable growth in the labor market. Our findings could be explained structurally by heterogeneity in experienced inflation and wage inflation expectations.

Date: 2025-05
New Economics Papers: this item is included in nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2505.05757 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2505.05757

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().