Essentially Unemployed: Potential Implications of the COVID-19 Crisis on Wage Inequality

Ansel Schiavone

Working Paper Series, Department of Economics, University of Utah from University of Utah, Department of Economics

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

Keywords: Wage inequality; unemployment; COVID-19; Markov-Chain-Monte-Carlo; Gibbs sam-pling; structuralist method JEL Classification:E24; E27; C15 (search for similar items in EconPapers)
Pages: 15
Date: 2020
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:uta:papers:2020_06

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