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)
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:
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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