Heterogeneous Effects of Monetary Policy on Job Flows across Income, Race, Gender, and Age

Abstract

We study the heterogenous impact of monetary policy, through high-frequency identified shocks, across demographic and income groups. Our evidence shows significant heterogeneity in the monetary transmission across income groups, while significant differences across demographics emerge only for individuals whose income is below the median. We then build a model with idiosyncratic risk and occupational choices that provides a rationale for the channels we uncover: with uninsurable risk, low earners experience a larger decline in earnings, which reduces their likelihood of participating in the labor market and moving across occupations.