By Victoria Gregory, Economist, St. Louis Fed; Guido Menzio, Professor, New York University; and David Wiczer; Assistant Professor, Stony Brook University

Recessions do not affect every worker equally; the depth of the decline and the speed of recovery differ along a variety of observable dimensions such as sex, race, education and age.

The pandemic-induced recession and the following recovery have made this glaringly apparent, prompting discussion and investigation around phrases such as a “k-shaped” recovery—in which some workers have done well and others still struggle—and the “she-cession”—in which labor turmoil disproportionately affected women.

But asymmetric recessions are nothing new. As we argue, the dynamics of recent recessions, with their slow recoveries, are driven more importantly by which workers are searching for jobs, not the jobs themselves. Yet, while some groups of workers have always experienced higher unemployment rates during...

Given ongoing disruptions to child care arrangements, many working parents, especially of very young children, must provide more hands-on care during the workday, rendering them unable to work the same number of hours (if at all) than they otherwise would. This represents an important labor supply bottleneck that is contributing to a shortage of workers that has attracted considerable public attention.

According to the Census Bureau’s Household Pulse Survey, 25% of parents with very young children reported that their children were unable to attend child care arrangements in mid- to late-May* because of the pandemic, versus 16% for those with school-age children. Importantly, these constraints predominantly keep women out of the workforce: Roughly 39% of prime-working-age women with children (versus 12% of men) reported not working because they were caring for children not in school or day care. This lopsided care arrangement has the capacity to depress women’s upward...

By Ana Hernández Kent, Senior Researcher, Institute for Economic Equity

Widespread racial, ethnic and gender economic disparities exist in the United States. These gaps represent lost potential—fewer innovations, less-diverse ideas, untapped talent and unrealized growth. Though these disparities most keenly affect minority communities and women, they also have an economic cost for everyone.

What exactly is that cost, and how much could the economy improve if the gaps didn’t exist?

Those are the exact questions that colleagues from across the Federal Reserve System and I set out to answer. The result was the creation of a data simulation tool offered for free to the public via Fed Communities, a website that highlights the Federal Reserve’s work in underserved communities.

Using the tool, one can visualize the estimated economic gain—measured by annual gross domestic product (GDP)—for each state and Washington, D.C.; this is the potential benefit...

By Victoria Gregory, Economist, St. Louis Fed; Guido Menzio, Professor, New York University; and David Wiczer; Assistant Professor, Stony Brook University

Recessions do not affect every worker equally; the depth of the decline and the speed of recovery differ along a variety of observable dimensions such as sex, race, education and age.

The pandemic-induced recession and the following recovery have made this glaringly apparent, prompting discussion and investigation around phrases such as a “k-shaped” recovery—in which some workers have done well and others still struggle—and the “she-cession”—in which labor turmoil disproportionately affected women.

But asymmetric recessions are nothing new. As we argue, the dynamics of recent recessions, with their slow recoveries, are driven more importantly by which workers are searching for jobs, not the jobs themselves. Yet, while some groups of workers have always experienced higher unemployment rates during...

You are receiving this newsletter because you subscribed via our website or agreed to receive emails from the St. Louis Fed. To ensure you continue to receive the latest Central Banker: News and Notes from the St. Louis Fed, add us to your address book. Want to change how you receive these emails? You can update your preferences or unsubscribe from all lists.

You are receiving this newsletter because you subscribed via our website or agreed to receive emails from the St. Louis Fed. To ensure you continue to receive the latest Central Banker: News and Notes from the St. Louis Fed, add us to your address book. Want to change how you receive these emails? You can update your preferences or unsubscribe from all lists.

Given ongoing disruptions to child care arrangements, many working parents, especially of very young children, must provide more hands-on care during the workday, rendering them unable to work the same number of hours (if at all) than they otherwise would. This represents an important labor supply bottleneck that is contributing to a shortage of workers that has attracted considerable public attention.

According to the Census Bureau’s Household Pulse Survey, 25% of parents with very young children reported that their children were unable to attend child care arrangements in mid- to late-May* because of the pandemic, versus 16% for those with school-age children. Importantly, these constraints predominantly keep women out of the workforce: Roughly 39% of prime-working-age women with children (versus 12% of men) reported not working because they were caring for children not in school or day care. This lopsided care arrangement has the capacity to depress women’s upward...

Residential property can reveal insights about the financial stability of a country’s economy. The FRED graph above shows the annual changes in the residential property prices for both the United States and Australia for the past 20 years. While the size and location of properties obviously affect residential property tax values, so do the financing of these properties and financial market conditions.

For example, the Financial Crisis of 2008 dramatically dampened U.S. property prices. The U.S. house price index reflects the economic turmoil during that time, when annual house prices declined as much as 19.6% in the third quarter of 2008 from their levels during the same quarter of the previous year. The crisis also trickled down to Australia, causing local property prices to decline, although not as deeply as in the U.S.

In 2019, price declines in Australia’s housing market repeated those from 2008. While Australia’s economy was doing relatively well...

By Paulina Restrepo-Echavarria, Senior Economist; and Praew Grittayaphong, Research Associate

In 2020, governments around the globe started debt-financed spending to battle COVID-19 and to keep economies afloat. Although fiscal responses to this pandemic varied dramatically among countries, together, they added $24 trillion to global debt according to the Institute of International Finance (IIF).

Debt issuance helps cover the gap between how much a government wants to spend and the revenue it expects to receive that year. When issuing new debt, the government may decide to issue it in a local currency or a foreign currency. Foreign currency borrowing can help some countries attract diverse funding sources, mitigate investor fears of local currency fluctuations and reduce financial frictions. For those reasons, many emerging market economies issue a portion of their debt in U.S. dollars.

By Victoria Gregory, Economist, St. Louis Fed; Guido Menzio, Professor, New York University; and David Wiczer; Assistant Professor, Stony Brook University

Recessions do not affect every worker equally; the depth of the decline and the speed of recovery differ along a variety of observable dimensions such as sex, race, education and age.

The pandemic-induced recession and the following recovery have made this glaringly apparent, prompting discussion and investigation around phrases such as a “k-shaped” recovery—in which some workers have done well and others still struggle—and the “she-cession”—in which labor turmoil disproportionately affected women.

But asymmetric recessions are nothing new. As we argue, the dynamics of recent recessions, with their slow recoveries, are driven more importantly by which workers are searching for jobs, not the jobs themselves. Yet, while some groups of workers have always experienced higher unemployment rates during...

Given ongoing disruptions to child care arrangements, many working parents, especially of very young children, must provide more hands-on care during the workday, rendering them unable to work the same number of hours (if at all) than they otherwise would. This represents an important labor supply bottleneck that is contributing to a shortage of workers that has attracted considerable public attention.

According to the Census Bureau’s Household Pulse Survey, 25% of parents with very young children reported that their children were unable to attend child care arrangements in mid- to late-May* because of the pandemic, versus 16% for those with school-age children. Importantly, these constraints predominantly keep women out of the workforce: Roughly 39% of prime-working-age women with children (versus 12% of men) reported not working because they were caring for children not in school or day care. This lopsided care arrangement has the capacity to depress women’s upward...

Residential property can reveal insights about the financial stability of a country’s economy. The FRED graph above shows the annual changes in the residential property prices for both the United States and Australia for the past 20 years. While the size and location of properties obviously affect residential property tax values, so do the financing of these properties and financial market conditions.

For example, the Financial Crisis of 2008 dramatically dampened U.S. property prices. The U.S. house price index reflects the economic turmoil during that time, when annual house prices declined as much as 19.6% in the third quarter of 2008 from their levels during the same quarter of the previous year. The crisis also trickled down to Australia, causing local property prices to decline, although not as deeply as in the U.S.

In 2019, price declines in Australia’s housing market repeated those from 2008. While Australia’s economy was doing relatively well...

By Victoria Gregory, Economist, St. Louis Fed; Guido Menzio, Professor, New York University; and David Wiczer; Assistant Professor, Stony Brook University

Recessions do not affect every worker equally; the depth of the decline and the speed of recovery differ along a variety of observable dimensions such as sex, race, education and age.

The pandemic-induced recession and the following recovery have made this glaringly apparent, prompting discussion and investigation around phrases such as a “k-shaped” recovery—in which some workers have done well and others still struggle—and the “she-cession”—in which labor turmoil disproportionately affected women.

But asymmetric recessions are nothing new. As we argue, the dynamics of recent recessions, with their slow recoveries, are driven more importantly by which workers are searching for jobs, not the jobs themselves. Yet, while some groups of workers have always experienced higher unemployment rates during...