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The Distributional Short-Term Impact of the COVID-19 Crisis on Wages in the United States

Yonatan Berman

MPRA Paper from University Library of Munich, Germany

Abstract: This paper uses Bureau of Labor Statistics employment and wage data to study the distributional impact of the COVID-19 crisis on wages in the United States by mid-April. It answers whether wages of lower-wage workers decreased more than others', and to what extent. We find that the COVID-19 outbreak exacerbates existing inequalities. Workers at the bottom quintile in mid-March were three times more likely to be laid off by mid-April compared to higher-wage workers. Weekly wages of workers at the bottom quintile decreased by 6% on average between mid-February and mid-March and by 26% between mid-March and mid-April. The average decrease for higher quintiles was less than 1% between mid-February and mid-March and about 10% between mid-March and mid-April. We also find that workers aged 16-24 were hit much harder than older workers. Hispanic workers were also hurt more than other racial groups. Their wages decreased by 2-3 percentage points more than other workers' between mid-March and mid-April.

Keywords: Income inequality; COVID-19; Growth incidence curves (search for similar items in EconPapers)
JEL-codes: D63 J3 (search for similar items in EconPapers)
Date: 2020-05-17
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Working Paper: The Distributional Short-Term Impact of the COVID-19 Crisis on Wages in the United States (2020) Downloads
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