Monetary policy and the racial wage gap

Edmond Berisha; Ram Sewak Dubey; Eric Olson

doi:10.1007/s00181-022-02233-5

Monetary policy and the racial wage gap

Edmond Berisha, Ram Sewak Dubey, Eric Olson

Economics

Research output: Contribution to journal › Article › peer-review

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.

Original language	English
Pages (from-to)	3045-3059
Number of pages	15
Journal	Empirical Economics
Volume	63
Issue number	6
DOIs	https://doi.org/10.1007/s00181-022-02233-5
State	Published - Dec 2022

Keywords

Decomposition
Inequality
Monetary policy

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title = "Monetary policy and the racial wage gap",

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, Inequality, Monetary policy",

author = "Edmond Berisha and Dubey, {Ram Sewak} and Eric Olson",

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AB - 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.

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KW - Inequality

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Monetary policy and the racial wage gap

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Keywords

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