COVID-19 restrictions in the USwage vulnerability by education, race and gender

  1. Borja Gambau 1
  2. Juan C. Palomino 2
  3. Juan G. Rodríguez 3
  4. Raquel Sebastian 4
  1. 1 Universidad Complutense de Madrid
    info

    Universidad Complutense de Madrid

    Madrid, España

    ROR 02p0gd045

  2. 2 University of Oxford (UK), INET and Department of Social Policy and Intervention
  3. 3 Universidad Complutense de Madrid (Spain), ICAE, EQUALITAS and CEDESOG
  4. 4 Universidad Complutense de Madrid (Spain), ICAE and EQUALITAS
Revista:
Documentos de Trabajo (ICAE)

ISSN: 2341-2356

Año de publicación: 2021

Número: 8

Páginas: 1-38

Tipo: Documento de Trabajo

Otras publicaciones en: Documentos de Trabajo (ICAE)

Resumen

We study the wage vulnerability to the stay-at-home orders and social distancing measures imposed to prevent COVID-19 contagion in the US by education, race, gender, and state. Under 2 months of lockdown plus 10 months of partial functioning we find that both wage inequality and poverty increase in the US for all social groups and states. For the whole country, we estimate an increase in inequality of 4.1 Gini points and of 9.7 percentage points for poverty, with uneven increases by race, gender, and education. The restrictions imposed to curb the spread of the pandemic produce a double process of divergence: both inequality within and between social groups increase, with education accounting for the largest part of the rise in inequality between groups. We also find that education level differences impact wage poverty risk more than differences by race or gender, making lower-educated groups the most vulnerable while graduates of any race and gender are similarly less exposed. When measuring mobility as the percentile rank change, most women with secondary education or higher move up, while most men without higher education suffer downward mobility. Our findings can inform public policy aiming to address the disparities in vulnerability to pandemic-related shocks across different socioeconomic groups.

Referencias bibliográficas

  • Almeida, V., Barrios, S., Christl, M., De Poli, S., Tumino, A., and van der Wielen, W. (2020): “Households’ income and the cushioning effect of fiscal policy measures during the Great Lockdown”, JRC Working Papers on Taxation & Structural Reforms 2020-06, Joint Research Centre (Seville site).
  • Bartik, A.W., Bertrand, M., Lin, F., Rothstein, J. and Unrath, M. (2020): “Measuring the labor market at the onset of the COVID-19 crisis”, NBER Working Paper No. 27613.
  • Barringer, H. R., Takeuchi, D. T., and Xenos, P. (1990): “Education, Occupational Prestige, and Income of Asian Americans”, American Sociological Association, 63, 27-43.
  • Bourguignon, F. (1979): “Decomposable Income Inequality Measures”, Econometrica, 47, 901-20.
  • Brunori, P., Maitino, M.L., Ravagli, L., and Sciclone, N. (2020): “Distant and Unequal. Lockdown and Inequalities in Italy”, Technical Report wp2020 13.rdf, Universita’ degli Studi di Firenze.
  • Bonacini, L., Gallo, G., & Scicchitano, S. (2021). “Working from home and income inequality: risks of a ‘new normal’ with COVID-19” Journal of Population Economics, 34(1), 303-360.
  • Chantreuil, F. and Trannoy, A. (2013): “Inequality decomposition values: The trade-off between marginality and efficiency”, Journal of Economic Inequality, 11, 83-98.
  • Chetty, R., Friedman, J. N., Hendren, N., Stepner, M., & The Opportunity Insights Team. (2020). “The economic impacts of COVID-19: Evidence from a new public database built using private sector data” NBER Working Paper. No. w27431
  • Dingel, J.I. and Neiman, B. (2020): “How many jobs can be done at home?”, Journal of Public Economics, 189, 104235.
  • Dong, D., Gozgor, G., Lu, Z., & Yan, C. (2021). “Personal consumption in the United States during the COVID-19 crisis”. Applied Economics, 53(11), 1311-1316.
  • Fairlie, R.W., Couch, K. and Xu, H. (2020): “The Impacts of COVID-19 on Minority Unemployment: First Evidence from April 2020 CPS Microdata”, NBER Working Paper No. 27246.
  • Forsythe, E., Kahn, L.B., Lange, F. and Wiczer, D.G. (2020): “Labor Demand in the Time of COVID-19: Evidence from Vacancy Postings and UI Claims”, NBER Working Paper No. 27061.
  • Foster, J.E., Greer, J., and Thorbecke, E. (1984): “A class of decomposable poverty indices”, Econometrica, 52: 761-766.
  • Foster, J.E. and Shneyerov, A.A. (2000): “Path Independent Inequality Measures”, Journal of Economic Theory, 91, 199-222.
  • Friedson, A.I., McNichols, D., Sabia, J.J. and Dave, D. (2020): “Shelter-in-place orders and public health: evidence from California during the COVID-19 pandemic”, Journal of Policy Analysis and Management, in press (https://doi.org/10.1002/pam.22267).
  • Furceri, D., Loungani, P., Ostry, J.D. and Pizzuto, P. (2020): “Will COVID-19 affect inequality? Evidence from past pandemics”, Covid Economics, 12, 138-57.
  • Goolsbee, A. and Syverson, Ch. (2021): “Fear, Lockdown, and Diversion: Comparing Drivers of Pandemic Economic Decline 2020”, Journal of Public Economics,193, in IMF (2021): “World Economic Outlook Update”. Retrieved 26January. Available at: https://www.imf.org/en/Publications/WEO/Issues/2021/01/26/2021-world-economicoutlook-update
  • Jenkins, S.P. (2006): “Estimation and interpretation of measures of inequality, poverty, and social welfare using Stata”. Presentation at North American Stata Users' Group Meetings 2006, Boston MA.
  • Kim, A.T., Kim, C.H., Tuttle, S.E. and Zhang, Y. (2021): “COVID-19 and the decline in Asian American employment”, Research on Social Stratification Mobility, 71, in Li, J., Vidyattama, Y., La, H.A., Miranti, R. and Sologon, D.M. (2020): “The Impact of COVID-19 and Policy Responses on Australian Income Distribution and Poverty”, Technical Report 2009.04037, arXiv.org.
  • Marrero, A.G. and Rodríguez, J.G. (2013): “Inequality of opportunity and growth”, Journal of Development Economics, 104, 107-122.
  • Montenovo, L., Jiang, X., Rojas, F.L., Schmutte, I.M., Simon, K.I., Weinberg, B.A. and Wing, C. (2020): “Determinants of Disparities in Covid-19 Job Losses”, NBER Working Paper No. 27132.
  • Moosa, I.A. (2020) “The effectiveness of social distancing in containing Covid-19”, Applied Economics, 52:58, 6292-6305, DOI: 10.1080/00036846.2020.1789061
  • O’Donoghue, C., Sologon, D.M., Kyzyma, I., and McHale, J. (2020): “Modelling the Distributional Impact of the COVID-19 Crisis”, Fiscal Studies, 41, 321-336.
  • Papageorge, N. W., Zahn, M. V., Belot, M., Van den Broek-Altenburg, E., Choi, S., Jamison, J. C., & Tripodi, E. (2021). “Socio-demographic factors associated with selfprotecting behavior during the Covid-19 pandemic”. Journal of Population Economics, 34(2), 691-738.
  • Palomino, J.C., Rodríguez, J.G. and R. Sebastian (2020): “Wage inequality and poverty effects of lockdown and social distancing in Europe”, European Economic Review, 129, 103564.
  • Qiu, Y., Chen, X., & Shi, W. (2020). “Impacts of social and economic factors on the transmission of coronavirus disease 2019 (COVID-19) in China”. Journal of Population Economics, 33, 1127-1172.
  • Rodríguez, J.G. (2004): “Descomposición Factorial de la Desigualdad de la Renta”, Revista de Economía Aplicada, 12, 25-46.
  • Shapley, L. S. (1953): “A value for n-person games”, Contributions to the Theory of Games, 2, 307-317.
  • Shorrocks, A.F. (1980): “The Class of Additively Decomposable Inequality Measures”, Econometrica, 48, 613-625.
  • Shorrocks, A.F. (2013): “Decomposition procedures for distributional analysis: A unified framework based on the Shapley value”, Journal of Economic Inequality, 11, 99-126.
  • Stantcheva, S. (2021): “Inequalities in the times of a pandemic”, Economic Policy, in Appendix A: The matrices of essentiality, closure and teleworking.