Recession causes inequality ‘double whammy’ – research
Paper links loss of hours worked to inequality, with recessions causing a negative ratchet effect
Recessions are a key factor driving increased inequality in the US, as they impose a “double whammy” on the poorest members of society, new research finds.
Jonathan Heathcote, Fabrizio Perri and Giovanni Violante study the evolution of inequality in earning among “prime-age men” in the US over the period from 1968 to 2018. In the working paper, published by the National Bureau of Economic Research, they highlight a “strong cyclical component to the dynamics of earnings inequality” at the lower
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