Heterogeneous Effects of Monetary Policy Shocks: Evidence from the Czech Labor Market

Abstract

Using unique contract-level data from the Czech labor market, we investigate how monetary policy shocks, identified by the high-frequency surprises in interest rate futures, affect the distribution of wages and hours worked. Consistent with existing literature, our findings indicate that low-wage groups are more impacted by these shocks than high-wage counterparts. The novelty lies in our exploration of the heterogeneous effects across different demographic and sectoral groups. Our results reveal that age, education, sector of employment, and the length of employment contracts play important roles in how wages and working hours respond to policy shocks.