Monetary Policy and Racial Differentials in Labor Market Outcomes

Monetary Policy and Racial Differentials in Labor Market Outcomes | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Monetary Policy and Racial Differentials in Labor Market Outcomes Charles Weise, Tsvetomir Petkov This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-4602047/v1 This work is licensed under a CC BY 4.0 License Status: Published Journal Publication published 28 Mar, 2026 Read the published version in The Journal of Economic Inequality → Version 1 posted 9 You are reading this latest preprint version Abstract This paper examines the empirical relationship between monetary policy and racial and ethnic labor market outcomes. Estimating structural vector autoregressions with external instruments, we find a much larger response of labor outcome gaps than has been documented in previous literature. These differential outcomes persist for Black workers of both sexes even within the same age group and level of educational attainment, while Hispanic and white responses are similar within such groupings. Estimates based on individual-level data show that differences in demographic characteristics account for a large portion of the response of Hispanic-white employment gaps to economic downturns, but not of Black-white employment gaps. Our results suggest that monetary policy contractions may have a substantially disparate effect on Black and Hispanic workers. JEL classifications: E52, J15 monetary policy race inequality Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Published Journal Publication published 28 Mar, 2026 Read the published version in The Journal of Economic Inequality → Version 1 posted Editorial decision: Revision requested 30 Jan, 2025 Reviews received at journal 14 Oct, 2024 Reviews received at journal 26 Sep, 2024 Reviewers agreed at journal 09 Sep, 2024 Reviewers agreed at journal 26 Aug, 2024 Reviewers invited by journal 26 Aug, 2024 Editor assigned by journal 19 Jun, 2024 Submission checks completed at journal 19 Jun, 2024 First submitted to journal 18 Jun, 2024 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-4602047","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":323429864,"identity":"91e05b1f-f7b5-4569-bb04-5ca56e95ebde","order_by":0,"name":"Charles Weise","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA+UlEQVRIiWNgGAWjYJCCAwwMNhAWYwOEliBCSxoDAxszCVqA4DAJWvhnJB88+KPivF2/fP8xyZ87DufLOzAfvM2DR4vEjbSEwzxnbifPbGNmk+Y9c9hy4wG2ZGt8WgykcwwOM7bdTjY4BtTC2HbYwLCBx0wav5b8Dwd//juXbA/UIvkTrIX/GwEtOQwHeBsO2BmwMbNJ8AK1yDPwsOHVInH/mcFhnmPJCRLHko2tec+kGxgwsxlbzsGjhb/n8OOPP2rs7PmbDz68+XOHtYF8e/PDG2/waIGBxAYGBhZwdBgcJkI5CNgDMfMHEEu+gUgto2AUjIJRMGIAAGRgTJpaP9nmAAAAAElFTkSuQmCC","orcid":"","institution":"Gettysburg College","correspondingAuthor":true,"prefix":"","firstName":"Charles","middleName":"","lastName":"Weise","suffix":""},{"id":323429865,"identity":"0e9e820a-808b-4cd7-95db-b4f3916da6ab","order_by":1,"name":"Tsvetomir Petkov","email":"","orcid":"","institution":"Gettysburg College","correspondingAuthor":false,"prefix":"","firstName":"Tsvetomir","middleName":"","lastName":"Petkov","suffix":""}],"badges":[],"createdAt":"2024-06-18 21:12:27","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-4602047/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-4602047/v1","draftVersion":[],"editorialEvents":[{"content":"https://doi.org/10.1007/s10888-025-09719-z","type":"published","date":"2026-03-28T16:11:09+00:00"}],"editorialNote":"","failedWorkflow":false,"files":[{"id":105755993,"identity":"04d1ec21-76de-4f0d-a023-47b7e98ed09f","added_by":"auto","created_at":"2026-03-30 16:33:59","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":5716353,"visible":true,"origin":"","legend":"","description":"","filename":"WP161824.pdf","url":"https://assets-eu.researchsquare.com/files/rs-4602047/v1_covered_133dbd9a-3b47-4a8e-b6af-2ac5c6d1b4f2.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Monetary Policy and Racial Differentials in Labor Market Outcomes","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":true,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"the-journal-of-economic-inequality","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"joei","sideBox":"Learn more about [The Journal of Economic Inequality](http://link.springer.com/journal/10888)","snPcode":"10888","submissionUrl":"https://submission.nature.com/new-submission/10888/3","title":"The Journal of Economic Inequality","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"em","reportingPortfolio":"Springer Hybrid","inReviewEnabled":true,"inReviewRevisionsEnabled":false},"keywords":"monetary policy, race, inequality","lastPublishedDoi":"10.21203/rs.3.rs-4602047/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-4602047/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis paper examines the empirical relationship between monetary policy and racial and ethnic labor market outcomes.\u0026nbsp; Estimating structural vector autoregressions with external instruments, we find a much larger response of labor outcome\u0026nbsp; gaps than has been documented in previous literature. These differential outcomes persist for Black workers of both sexes\u0026nbsp; even within the same age group and level of educational attainment, while Hispanic and white responses are similar within\u0026nbsp; such groupings. Estimates based on individual-level data show that differences in demographic characteristics account for\u0026nbsp; a large portion of the response of Hispanic-white employment gaps to economic downturns, but not of Black-white\u0026nbsp; employment gaps. 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