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.