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The K-Shaped Recovery: Examining the Diverging Fortunes of Workers in the Recovery from the COVID-19 Pandemic Using Business and Household Survey Microdata

Author

Listed:
  • Michael Dalton

    (U.S. Bureau of Labor Statistics)

  • Jeffrey A. Groen

    (U.S. Bureau of Labor Statistics)

  • Mark A. Loewenstein

    (U.S. Bureau of Labor Statistics)

  • David S. Piccone

    (U.S. Bureau of Labor Statistics)

  • Anne E. Polivka

    (U.S. Bureau of Labor Statistics)

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.

Suggested Citation

  • Michael Dalton & Jeffrey A. Groen & Mark A. Loewenstein & David S. Piccone & Anne E. Polivka, 2021. "The K-Shaped Recovery: Examining the Diverging Fortunes of Workers in the Recovery from the COVID-19 Pandemic Using Business and Household Survey Microdata," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(3), pages 527-550, September.
    • Handle: RePEc:spr:joecin:v:19:y:2021:i:3:d:10.1007_s10888-021-09506-6
    DOI: 10.1007/s10888-021-09506-6
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    References listed on IDEAS

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    1. Jonathan Heathcote & Fabrizio Perri & Gianluca Violante, 2020. "The Rise of US Earnings Inequality: Does the Cycle Drive the Trend?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 37, pages 181-204, August.
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    Cited by:

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    2. Adarov, Amat & Guénette, Justin Damien & Ohnsorge, Franziska, 2022. "Another legacy of the COVID-19 pandemic: Income divergence," Journal of Policy Modeling, Elsevier, vol. 44(4), pages 842-854.
    3. Yaping Liu & Zhe Huang & Jin Chen & Linlin Nie, 2023. "Diagnosis of the Livelihood Sustainability and Its Obstacle Factors for Poverty-Alleviation-Relocation Residents in Tourism Communities: Data from China," Sustainability, MDPI, vol. 15(7), pages 1-27, April.
    4. Surbhi Kesar & Snehashish Bhattacharya & Lopamudra Banerjee, 2020. "Contradictions and crisis in the world of work in the present conjuncture: Informality, precarity and the pandemic," Working Papers 253, Department of Economics, SOAS University of London, UK, revised Oct 2022.
    5. Eunice S. Han, 2023. "What did unions do for union workers during the COVID‐19 pandemic?," British Journal of Industrial Relations, London School of Economics, vol. 61(3), pages 623-652, September.
    6. Keiichi Morimoto & Shiba Suzuki, 2022. "Ambiguity in a pandemic recession, asset prices, and lockdown policy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(5), pages 1039-1070, October.
    7. Joe Piacentini & Harley Frazis & Peter B. Meyer & Michael Schultz & Leo Sveikauskas, 2022. "The Impact of COVID-19 on Labor Markets and Inequality," Economic Working Papers 551, Bureau of Labor Statistics.
    8. Irene Y. H. Ng & Zhi Han Tan & Vincent Chua & Annie Cheong, 2022. "Separate Lives, Uncertain Futures: Does Covid-19 Align or Differentiate the Lives of Low- and Higher-Wage Young Workers?," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 17(6), pages 3349-3380, December.
    9. Jacob Jennings & Jacqueline Strenio & Iris Buder, 2022. "Occupational prestige: American stratification," Review of Evolutionary Political Economy, Springer, vol. 3(3), pages 575-598, October.
    10. Beenstock Michael & Felsenstein Daniel, 2021. "Freedom of Information and Personal Confidentiality in Spatial COVID-19 Data," Journal of Official Statistics, Sciendo, vol. 37(4), pages 791-809, December.
    11. Owen Davis, 2021. "Employment and Retirement Among Older Workers During the Covid-19 Pandemic," SCEPA working paper series. 2021-06, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    12. Owen Davis, 2021. "Employment and Retirement Among Older Workers During the Covid-19 Pandemic," SCEPA publication series. 2021-06, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.

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