Monetary policy and the racial wage gap

Edmond Berisha (), Ram Dubey () and Eric Olson ()
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Edmond Berisha: Montclair State University
Eric Olson: The University of Tulsa

Empirical Economics, 2022, vol. 63, issue 6, No 8, 3045-3059

Abstract: Abstract This paper aims to clarify the relationship between monetary policy shocks and wage inequality. We emphasize the relevance of within- and between-wage-group inequalities in explaining total wage inequality in the USA. Relying on the quarterly data for the period 2000–2020, our analysis shows that racial disparities explain 12% of observed total wage inequality. Subsequently, we examine the role of monetary policy in wage inequality. We do not find compelling evidence that shows that monetary policy plays a role in exacerbating the racial wage gap. However, there is evidence that accommodative monetary policy plays a role in magnifying between-group wage inequalities but the impact occurs after 2008.

Keywords: Decomposition; Monetary policy; Inequality (search for similar items in EconPapers)
JEL-codes: D60 O40 O50 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s00181-022-02233-5

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