Sammendrag
Studying the distributional effects of monetary policy has gained increased importance in monetary policy research in recent years. By utilizing detailed annual employer-employee and register-based data at the individual level on labor income and labor market transitions, this thesis will aim at estimating the distributional effects of monetary policy on labor income in Norway. Furthermore, this thesis aims to uncover the transmission channels by examining how changes in monetary policy impact labor income at the intensive and extensive margin. The main findings are that individuals at the bottom of the labor income distribution are more affected by a shock in the policy rate than individuals higher up on the labor income distribution. The findings mainly arise from the fact that individuals with lower incomes are more likely to exit the labor market following a contractionary monetary policy shock compared to those with higher incomes.