Monetary Policy Shocks and Skill Differences in the U.S. Labor Market

This paper studies the effect of monetary policy shocks on different demographic groups in the U.S. labor market. I look at the effect of a contractionary monetary policy shock on unemployment rates of high and low-skill workers, finding that the low-skill group is more sensitive to these shocks than the high-skill. Further breaking the skill groups down by gender and race, I find that female workers and non-White workers, regardless of their skill type, are more adversely affected by these shocks. Results suggest monetary policy shocks clearly have heterogeneous effects in the labor market, which should be taken into consideration while implementing monetary policy.