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Wednesday, October 06, 2010

Unemployment and Underemployment by Income

Menzie Chinn looks at unemployment by income group: 

The Incidence of Unemployment and Underemployment, by Income, by Menzie Chinn: As we ponder the plight of the over-$250K household income group (see the poignant story here), I think it worthwhile to examine the unemployment and underemployment rates for lower-income households. In researching statistics for our forthcoming book, Lost Decades, Jeff Frieden and I stumbled upon this study by Andrew Sum and Ishwar Khatiwada, with Sheila Palma... They characterized the mid-2010 employment situation as "A Truly Great Depression Among the Nation's Low Income Workers Amidst Full Employment Among the Most Affluent".
We asked the authors for an update of their results, and they kindly obliged. Below, we present a graph of unemployment and underemployment rates, for the January - August 2010 period, conditional on household income in 2008.

sum1.gif

Figure 1: Unemployment rate (blue) and underemployment rate (red), for January-August 2010, based on household income in fourth quarter of 2008. Blue dashed line is average unemployment rate for entire sample; purple dashed line is average unemployment plus underemployment ratio for entire sample. Source: Calculations based on estimates provided by Andrew Sum and Joseph McLaughlin.

    Posted by on Wednesday, October 6, 2010 at 02:00 AM in Economics, Unemployment | Permalink  Comments (15)


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