Abstract
This paper examines employment patterns by wage group over the course of the coronavirus pandemic in the United States using microdata from two well-known data sources from the U.S. Bureau of Labor Statistics: the Current Employment Statistics and the Current Population Survey. We find establishments paying the lowest average wages and the lowest wage workers had the steepest decline in employment and experienced the most persistent losses. We disentangle the extent to which the effect observed for low wage workers is due to these workers being concentrated within a few low wage sectors of the economy versus the pandemic affecting low wage workers in a number of sectors across the economy. Our results indicate that the experience of low wage workers is not entirely due to these workers being concentrated in low wage sectors — for many sectors, the lowest wage quintiles in that sector also has had the worst employment outcomes. From April 2020 to May 2021, between 23% and 46% of the decline in employment among the lowest wage establishments was due to within-industry changes. Another important finding is that even for those who remain employed during the pandemic, the probability of becoming part-time for economic reasons increased, especially for low-wage workers.
Article PDF
Similar content being viewed by others
Change history
06 October 2021
A Correction to this paper has been published: https://doi.org/10.1007/s10888-021-09513-7
References
Bartik, A.W., Bertrand, M., Lin, F, Rothstein, J, Unrath, M.: Measuring the Labor Market at the Onset of the COVID-19 Crisis. Brookings Papers on Economic Activity, 2020 (COVID-19 and the Economy: Part One, Summer 2020), 239–268 (2020)
Cajner, T., Crane, L.D., Decker, R.A., Grigsby, J., Hamins-Puertolas, A., Hurst, E., Kurz, C., Yildirmaz, A. The US Labor Market during the Beginning of the Pandemic Recession. Brookings Papers on Economic Activity, 2020 (COVID-19 and the Economy: Part One, Summer 2020), 3–34 (2020). https://www.jstor.org/journal/broopapeeconacti
Chetty, R., Friedman, J.N., Hendren, N., Stepner, M., and the Opportunity Insights Team. The Economic Impacts of COVID-19: Evidence from a New Public Database Built Using Private Sector Data. NBER Working Paper 27431 (2020). https://doi.org/10.3386/w27431
Chetty, R., Stepner, M., Abraham, S., Lin, S., Scuderi, B., Turner, N., Bergeron, A., Cutler, D.: The association between income and life expectancy in the United States, 2001-2014. JAMA. 315(16), 1750–1766 (2016)
Dalton, Michael, Elizabeth Weber Handwerker, and Mark A. Loewenstein. 2020. “Employment changes by employer size during the COVID-19 pandemic: a look at the Current Employment Statistics survey microdata.” Monthly Labor Review, October. https://doi.org/10.21916/mlr.2020.23
Davis, S.J., Von Wachter, T.: Recessions and the costs of job loss. Brook. Pap. Econ. Act. 43(2), 1–72 (2011)
Dey, Matthew, and Mark A. Loewenstein. 2020. “How many workers are employed in sectors directly affected by Covid-19 shutdowns, where do they work, and how much do they earn?” Monthly Labor Review, April. https://doi.org/10.21916/mlr.2020.6
Dey, Matthew, Mark A. Loewenstein, David S. Piccone Jr., and Anne E. Polivka. 2020. “Demographics, Earnings, and Family Characteristics of Workers in Sectors Initially Affected by Covid-19 Shutdowns.” Monthly Labor Review, June. https://doi.org/10.21916/mlr.2020.11
Heathcote, J., Perri, F., Violante, G.L.: The rise in US earnings inequality: does the cycle drive the trend? Rev. Econ. Dyn. 37, S181–S204 (2020)
Sullivan, D., Von Wachter, T.: Job displacement and mortality: an analysis using administrative data. Q. J. Econ. 124(3), 1265–1306 (2009)
Yagan, D.: Employment hysteresis from the Great Recession. J. Polit. Econ. 127(5), 2505–2558 (2019)
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher’s Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Any analysis, opinions, and conclusions expressed herein are those of the authors and do not necessarily represent the views of the U.S. Bureau of Labor Statistics.
Supplementary Information
ESM 1
(DOCX 21.5 kb)
Rights and permissions
About this article
Cite this article
Dalton, M., Groen, J.A., Loewenstein, M.A. et al. The K-Shaped Recovery: Examining the Diverging Fortunes of Workers in the Recovery from the COVID-19 Pandemic Using Business and Household Survey Microdata. J Econ Inequal 19, 527–550 (2021). https://doi.org/10.1007/s10888-021-09506-6
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10888-021-09506-6