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

Berman, Yonatan (2020): The Distributional Short-Term Impact of the COVID-19 Crisis on Wages in the United States.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Income inequality, COVID-19, Growth incidence curves
• Subjects: D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs

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