Who's at Risk? Effects of Inflation on Unemployment Risk
Fuente:
arXiv
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Preprint |
| Published: |
2025
|
| Subjects: | |
| Online Access: | |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1866915279133474816 |
|---|---|
| author | Ahn, Hie Joo Nguyen, Lam |
| author_facet | Ahn, Hie Joo Nguyen, Lam |
| contents | We empirically investigate the distributional effects of inflation on workers' unemployment tail risks using instrumental variable quantile regression. We find that supply-driven inflation disproportionately raises unemployment tail risks for cyclically vulnerable workers in both the short and medium term, while demand-driven inflation has differential effects -- limited to race and reason for unemployment -- only in the medium term. Demand-boosting policies, including monetary policy, can inadvertently widen those disparities through the inflation channel, underscoring the importance of inflation stabilization in promoting equitable growth in the labor market. Our findings could be explained structurally by heterogeneity in experienced inflation and wage inflation expectations. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2505_05757 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Who's at Risk? Effects of Inflation on Unemployment Risk Ahn, Hie Joo Nguyen, Lam General Economics Economics Applications We empirically investigate the distributional effects of inflation on workers' unemployment tail risks using instrumental variable quantile regression. We find that supply-driven inflation disproportionately raises unemployment tail risks for cyclically vulnerable workers in both the short and medium term, while demand-driven inflation has differential effects -- limited to race and reason for unemployment -- only in the medium term. Demand-boosting policies, including monetary policy, can inadvertently widen those disparities through the inflation channel, underscoring the importance of inflation stabilization in promoting equitable growth in the labor market. Our findings could be explained structurally by heterogeneity in experienced inflation and wage inflation expectations. |
| title | Who's at Risk? Effects of Inflation on Unemployment Risk |
| topic | General Economics Economics Applications |
| url | https://arxiv.org/abs/2505.05757 |