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Monetary policy and the racial wage gap

Author

Listed:
  • Edmond Berisha

    (Montclair State University)

  • Ram Sewak Dubey

    (Montclair State University)

  • Eric Olson

    (The University of Tulsa)

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.

Suggested Citation

  • Edmond Berisha & Ram Sewak Dubey & Eric Olson, 2022. "Monetary policy and the racial wage gap," Empirical Economics, Springer, vol. 63(6), pages 3045-3059, December.
    • Handle: RePEc:spr:empeco:v:63:y:2022:i:6:d:10.1007_s00181-022-02233-5
    DOI: 10.1007/s00181-022-02233-5
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    More about this item

    Keywords

    Decomposition; Monetary policy; Inequality;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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