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Is the Unemployment Rate a Good Measure of People Currently Out of Work?
Update, May 15, 2020: Following the release of the latest Current Population Survey estimates and related micro data, we are able to calculate the actual value of our U-Cov rate for April, which was 30.7% (not seasonally adjusted). This was over a 17 percentage point increase from March, significantly higher than the 10 percentage point increase in the official “U3” unemployment rate (to 14.4% in April). A 4.8 million increase in the number of people working part-time for economic reasons, a 4.3 million increase in those on unpaid leave, and a 4.5 million increase in those out of the ...
Heterogeneity in the Marginal Propensity to Consume: Evidence from Covid-19 Stimulus Payments
We identify 16,016 recipients of Covid-19 Economic Impact Payments in anonymized transaction-level debit card data from Facteus. We use an event study framework to show that in the two weeks following a sudden $1,200 payment from the IRS, consumers immediately increased spending by an average of $577, implying a marginal propensity to consume (MPC) of 48%. Consumer spending falls back to normal levels after two weeks. Stimulus recipients who live paycheck-to-paycheck spend 68% of the stimulus payment immediately, while recipients who save much of their monthly income spend 23% of the stimulus ...
How Much Did the Minimum Wage Drive Real Wage Growth During the Late 2010s?
For much of the recent expansion, real wage growth was surprisingly sluggish, by some measures never reaching its pace prior to the 2008 financial crisis, despite tight labor markets that drove the unemployment rate to 3.5%. However, on average, the lowest-earning workers fared substantially better, consistently experiencing real wage growth of 6% or more for much of the late 2010s, a pace well above the previous two decades.
How Similar Are Credit Scores Across Generations?
With the rise in economic inequality in the United States in recent decades, there has been growing concern about whether there is a sufficient degree of equality of opportunity in our society. Policymakers and researchers alike often focus on studies of intergenerational mobility as a way of assessing opportunity. These studies typically analyze distinct aspects of socioeconomic status, such as income, education, occupational status, and health, and measure the association in these outcomes between parents and their adult children.1 If the association (level of similarity) is very high, then ...
Explaining Variation in Real Wage Growth Over the Recent Expansion
In August 2019 the unemployment rate was roughly 1 percentage point below the Congressional Budget Office?s (CBO) estimate of its long-run or natural rate, nearly matching the unemployment rate gap that developed during the historically tight labor market of the late 1990s. Nevertheless, real wage growth remains well below its pace of the late 1990s and even that of the milder 2000s expansion.