Discussion Paper

Will COVID-19 Erase Black Workers' Labor Market Gains?

Abstract: Black workers experience what is known as a "high-beta" effect across the business cycle. They are hit harder during recessions but benefit more from the momentum of a recovery, especially during particularly strong economic periods. For three years preceding the COVID-19 recession, the United States was enjoying what has been referred to as a "hot" economy. During this time, Black workers regained some of the ground lost in labor market outcomes during the Great Recession, relative to white workers. The sudden onset of the COVID-19 recession reversed that progress. Even though the Congressional Budget Office projects the U.S. economy to regain its hot status as early as 2024, the negative impact of the COVID-19 recession could linger.

Keywords: labor market disparities; labor market gaps; unemployment; racism; hysteresis;

JEL Classification: E24; E60; J64;

https://doi.org/10.29338/ph2021-02

Bibliographic Information

Provider: Federal Reserve Bank of Atlanta

Part of Series: Policy Hub*

Publication Date: 2021-02-17

Number: 2021-2