Wage Growth over Unemployment Spells

Lei Fang and Pedro Silos

Policy Hub, 2020, vol. 2020, issue 9, 7

Abstract: This article looks at the wage growth associated with a spell of unemployment during the past three recessions. Our main findings are threefold. First, half of all unemployed workers experience a lower hourly wage once they regain employment. Second, after an unemployment spell, older workers and those without a college degree experience lower wage rowth. Third, workers who regain employment in a different industry than they were in previously tend to experience a substantial wage decline. The analysis suggests that the COVID-19 pandemic not only led to unprecedented job losses, but it could also result in sizable wage losses for a large fraction of unemployed workers as they return to employment.

Keywords: wage growth; unemployment spell; recession; industry switching (search for similar items in EconPapers)
JEL-codes: E24 J31 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:fip:a00068:99141

DOI: 10.29338/ph2020-09

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