New Work on the Benefits of Full Employment

Jared Bernstein Senior Fellow, Center on Budget and Policy Priorities

We’re not there (at full employment) yet, to be clear. I presented this paper last week at a conference–still a draft, but you’ll get the gist. And here’s an interview on the findings, conducted by an excellent interviewer who asked really hard questions.

Much of this will be familiar to denizens of these parts, but there’s a few new wrinkles. For example, while I’ve long documented the fact that tight job markets disproportionately helps the less well-off, I’ve done so largely through analysis of the building block of labor income: the hourly wage.

But here, I use new data to examine the impact of full employment on annual hours of work. The benefit gradient is similar, as you’ll see. I then map that onto to the annual earnings of affected workers and find pretty dramatic results, like the one you see below.

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This was reposted from Jared Bernstein's Daily Digest.

Jared Bernstein joined the Center on Budget and Policy Priorities in May 2011 as a Senior Fellow.  From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden, executive director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team. Prior to joining the Obama administration, Bernstein was a senior economist and the director of the Living Standards Program at the Economic Policy Institute in Washington, D.C. Between 1995 and 1996, he held the post of deputy chief economist at the U.S. Department of Labor. He is the author and co-author of numerous books, including “Crunch: Why Do I Feel So Squeezed?” and nine editions of “The State of Working America.”

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