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Discussion Paper
How Much Does Immigration Data Explain the Employment‑Gap Puzzle?
A puzzling feature of official U.S. employment statistics in recent years has been the increase in the gap between the nonfarm payroll and household employment numbers. This discrepancy is not trivial. From the end of 2021 though the end of 2024, net job gains in the payroll survey were 3.6 million larger than in the household survey. In this Liberty Street Economics post, we investigate one potential explanation for the emergence of this gap: a sharp rise in undocumented immigration during the post-COVID period that would be differentially reflected in the two surveys. We leverage ...
Discussion Paper
Do Employers Comply with Pay Transparency Requirements in Job Postings?
Over the past few months, New Jersey and Vermont have joined a growing number of U.S. states in requiring employers to include an estimated salary range in their online job listings. Has this push for greater pay transparency been effective? In this post, we use granular data on U.S. job postings from Lightcast to assess employers’ compliance with these new regulations. Focusing on the jurisdictions that adopted pay transparency laws early on, we find that many employers ignore pay transparency requirements; roughly a quarter of job listings covered by these laws fail to include salary ...
Discussion Paper
Do Job Postings Show Early Labor‑Market Effects of AI?
As generative AI tools become more widely used, a key issue is the technology’s impact on labor demand. Where might we find evidence of that impact? In this post, we examine whether early evidence of AI’s effect on the labor market appears in firms’ job postings. We combine an occupational measure of AI exposure with detailed U.S. job-posting data from Lightcast, which aggregates listings from company career pages, national and local job boards, and job-listing aggregators. Using this data, we test whether postings for AI-exposed occupations declined disproportionately since the release ...
Discussion Paper
Assessing the Current State of Wage Inflation
Economists often look at nominal wage growth to gauge labor market imbalances, price pressures, and households’ spending ability. But to use wage growth for these purposes, it is important to look through short-run fluctuations and retrieve underlying wage inflation. In this post, we use our own measure of wage growth persistence—called Trend Wage Inflation (TWIn in short)—to summarize what we learned from wage growth behavior in the past years and draw conclusions for what may lie ahead. Since peaking in late 2021, TWIn has been on a steady decline, reaching levels near those of the ...
Discussion Paper
The Post‑COVID Decline in the Labor Share
The labor share of income in the U.S. is currently at its lowest-ever level in the post-war period. The labor share measures the fraction of economic output paid to workers as wages and salaries. As such, it is a useful benchmark for wage growth: when the labor share falls, it means that productivity, prices, or both are growing faster than wages. After much-studied drops in the 2000s, the labor share fell sharply again after the COVID pandemic. In this post, we compare the dynamics of the labor share post-COVID to earlier periods to understand whether the recent decline represents the ...
Discussion Paper
A Turning Point in Wage Growth?
The surge in wage growth experienced by the U.S. economy over the past two years is showing some tentative signs of moderation. In this post, we take a closer look at the underlying data by estimating a model designed to isolate the persistent component—or trend—of wage growth. Our central finding is that this trend may have peaked in early 2022, having experienced an earlier rise and subsequent moderation that were broad-based across sectors. We also find that wage growth seems to be moderating more slowly than the trend in services inflation.
Discussion Paper
How Large Are Inflation Revisions? The Difficulty of Monitoring Prices in Real Time
With prices quickly going up after the COVID-19 pandemic, inflation releases have rarely been as present in the public debate as in recent years. However, since inflation estimates are frequently revised, how precise are the real-time data releases? In this Liberty Street Economics post, we investigate the size and nature of revisions to inflation. We find that inflation estimates for a given month can change substantially as subsequent data vintages are released. As an example, consider March 2009. With the economy contracting amid the Global Financial Crisis, the twelve-month inflation rate ...
Discussion Paper
Will the Moderation in Wage Growth Continue?
Wage growth has moderated notably following its post-pandemic surge, but it remains strong compared to the wage growth prevailing during the low-inflation pre-COVID years. Will the moderation continue, or will it stall? And what does it say about the current state of the labor market? In this post, we use our own measure of wage growth persistence – called Trend Wage Inflation (TWIn in short) – to look at these questions. Our main finding is that, after a rapid decline from 7 percent at its peak in late 2021 to around 5 percent in early 2023, TWin has changed little in recent months, ...
Discussion Paper
The Anatomy of Labor Demand Pre‑ and Post‑COVID
Has labor demand changed since the COVID-19 pandemic? In this post, we leverage detailed data on the universe of U.S. online job listings to study the dynamics of labor demand pre- and post-COVID. We find that there has been a significant shift in listings out of the central cities and into the “fringe” portion of large metro areas, smaller metro areas, and rural areas. We also find a substantial decline in job listings in computer and mathematical and business and financial operations occupations, and a corresponding increase in job openings in sales, office and administrative support, ...
Report
A Practitioner’s Note on the Shapley-Owen-Shorrocks Decomposition
Decomposing empirical or economic phenomena into the contributions of different inputs is a frequent goal of economic analysis. However, in many settings, the quantity of interest depends on many inputs which are aggregated non-linearly. In these settings, decompositions need not sum to one and often depend on the order in which inputs are “zeroed out.” In this note we describe a simple but convenient alternative. We show that using the Shapley-Owen value, extended to inequality decompositions in Shorrocks (1999, 2013), provides an additive decomposition that sums to one and is easily ...