Table 4.24
Impact of rising and falling unemployment on wage levels and gaps, 1979–2011
| 1979–1985 (High unemployment) |
1995–2000 (Low unemployment) |
2006–2011 (High unemployment) |
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|---|---|---|---|---|---|---|
| Men | Women | Men | Women | Men | Women | |
| A. Basic trends (actual change) | ||||||
| Unemployment rate change | 1.4 | 1.4 | -1.6 | -1.6 | 4.3 | 4.3 |
| Cumulative higher/lower unemployment rate* | 13.9 | 13.9 | -5.0 | -5.0 | 15.2 | 15.2 |
| 50/10 wage gap (log) | 9.6 | 17.2 | -4.1 | -1.8 | 2.7 | -0.4 |
| 90/50 wage gap (log) | 8.7 | 8.0 | 3.0 | 1.0 | 3.1 | 2.7 |
| B. Estimated cumulative impact of unemployment on: |
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| 1) Hourly wages** | ||||||
| Low wage | -25.2% | -18.4% | 11.1% | 8.2% | -29.4% | -21.5% |
| Median wage | -11.1 | -11.6 | 4.9 | 5.2 | -13.0 | -13.6 |
| High wage | -6.6 | -10.2 | 2.9 | 4.6 | -7.7 | -11.9 |
| 2) Wage ratios (log) | ||||||
| 50/10 | 14.1 | 6.8 | -6.2 | -2.9 | 16.4 | 7.9 |
| 90/50 | 4.5 | 1.5 | -2.0 | -0.6 | 5.3 | 1.7 |
| C. Unemployment contribution to change in: | ||||||
| 50/10 wage gap (log) | 146% | 39% | 150% | 168% | 617% | -2123% |
| 90/50 wage gap (log) | 52 | 18 | -66 | -61 | 169 | 64 |
* How much the unemployment rate exceeded or fell below the starting level across the span of the period, measured in percentage points
** Wages at the 10th, 50th, and 90th percentiles of the wage distribution
Source: Authors' analysis of Current Population Survey Outgoing Rotation Group microdata and Current Population Survey public data series using model from Katz and Krueger (1999)
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