No abstract

I analyze the impact of the CARES Act unemployment subsidy on US income and inequality in the first month of the COVID-19 crisis using March-April Current Population Survey data. I then use monthly industry unemployment data to extend this panel to July. Next, I estimate the impact of the expiration of the CARES Act subsidy on average income and inequality. Finally, I extend the panel to November to simulate the effects of proposed HEALS and HEROES Acts. I find the CARES Act subsidy was effective at increasing average income above pre-crisis levels and reducing inequality. The expiration of the CARES Act subsidy caused a decrease in average income and increase in inequality relative to pre-crisis levels. I find the proposed HEALS legislation will return inequality to near pre-crisis levels, while the proposed HEROES Act will result in higher income and lower inequality than existed before the crisis.

This paper presents a labor-constrained aggregate model of growth that explains stagnation and inequality as the result of structural change, which is defined as an exogenous increase in the employment share of low-productivity services. Productivity growth is increasing in the labor share, reminiscent of induced technical change.Productivity and real wage growth further are assumed to respond negatively to structural change. We label the positive (negative) difference between these effects dominant Lewis (Baumol) dynamics. In steady state, and across two model variants, structural change leads to stagnation.Only the model version with Keynesian aggregate demand, dominant Lewis dynamics and a weak profit squeeze also exhibits a falling labor share, and hence conforms to key stylized facts.

All series and definitions are obtained from BEA (2020). : Compensation is total remuneration, both monetary and in kind, payable by employers to employees in return for their work during the period. It consists of wages and salaries and of supplements to wages and salaries. Compensation is in thousands of current dollars (not adjusted for inflation). Statistics presented in thousands of dollars do not indicate more precision than statistics presented in millions of dollars. Industry detail for the years 1987-97 is based on the 1987 Standard Industrial Classification (SIC). Industry detail for the years 1963-86 is based on the 1972 SIC. Compensation SAGDP4S SAGDP4N (1997-2017): Compensation is total remuneration, both monetary and in kind, payable by employers to employees in return for their work during the period. It consists of wages and salaries and of supplements to wages and salaries. Compensation is in thousands of current dollars (not adjusted for inflation). Statistics presented in thousands of dollars do not indicate more precision than statistics presented in millions of dollars. Industry detail is based on the 2012 North American Industry Classification System (NAICS). Gross Operating Surplus SAGDP7S (1963-1997):Gross operating surplus is in thousands of current dollars (not adjusted for inflation). Statistics presented in thousands of dollars do not indicate more precision than statistics presented in millions of dollars. Industry detail for the years 1987-97 is based on the 1987 Standard Industrial Classification (SIC). Industry detail for the years 1963-86 is based on the 1972 SIC. SAGDP7N (1997-2017):Gross operating surplus is in thousands of current dollars (not adjusted for inflation). Statistics presented in thousands of dollars do not indicate more precision than statistics presented in millions of dollars. Industry detail is based on the 2012 North American Industry Classification System (NAICS). Employment SAEMP27S (1969-1996):Full-time and part-time wage and salary employment measured in number of employees. Wage and salary employment, also referred to as wage and salary jobs, measures the average annual number of full-time and part-time jobs in each area by place of work. All jobs for which wages and salaries are paid are counted. Although compensation paid to jurors, expert legal witnesses, prisoners, and justices of the peace (for marriage fees), is counted in wages and salaries, these activities are not counted as jobs in wage and salary employment. Corporate directorships are counted as self-employment. Industry detail for the years 1987-96 is based on the 1987 Standard Industrial Classification (SIC). Industry detail for the years 1969-86 is based on the 1972 SIC. CAEMP27S (1997-2017):Full-time and part-time wage and salary employment measured in number of employees. Wage and salary employment, also referred to as wage and salary jobs, measures the average annual number of full-time and part-time jobs in each area by place of work. All jobs for which wages and salaries are paid are co...

This paper analyzes regional contributions to the US payroll share from 1977 to 2017 and the four major business cycles throughout this period. We implement two empirical exercises. First, we decompose the US payroll share across states. Utilizing a Divisia index decomposition technique yields exact contributions of real wages, employment structure, labor productivity and relative prices across the states to the aggregate change in the payroll share. Key findings are that the decline in the aggregate (i) is driven by decoupling between real wage and labor productivity; and (ii) is initially driven by the rust belt states, but subsequently dominated by relatively large states. Second, we employ mixture models on real wages and labor productivity across US states to discern whether distinct mechanisms appear to generate these distributions. Univariate models (iii) indicate the possibility that two distinct mechanisms generate state labor productivities, raising the question of whether regional dualism has taken hold. Lastly, we use bivariate mixture models to investigate whether such dualism and decoupling manifest in the joint distributions of payroll shares and labor productivity, too. Results (iv) are affirmative, and further suggest a tendency for high performing states to have relatively high payroll shares initially, and low payroll shares more recently.