Working Paper: CEPR ID: DP14825
Authors: Annette Alstadsaeter; Bernt Bratsberg; Gaute Eielsen; Wojciech Kopczuk; Simen Markussen; Oddbjrn Raaum; Knut Red
Abstract: Using real-time register data we document the magnitude, dynamics andsocio-economic characteristics of the crisis-induced temporary andpermanent layoffs in Norway. We find evidence that the effects of socialdistancing measures quickly spread to industries that were not directlyaffected by policy. Close to 90\% of layoffs are temporary, althoughthis classification may change as the crisis progresses. Still, there issuggestive evidence of immediate stress on a subset of firms thatmanifests itself in permanent rather than temporary layoffs. We findthat the shock had a strong socio-economic gradient, hit a financiallyvulnerable population, and parents with younger children, and was drivenby layoffs in smaller, less productive, and financially weaker firms.Consequently though, the rise in unemployment likely overstates the loss ofoutput associated with the layoffs by about a third.
Keywords: No keywords provided
JEL Codes: J6; E24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Policy measures (E64) | Layoffs (J63) |
| Layoffs in sectors directly affected by policy measures (J63) | Layoffs in other sectors (J63) |
| Policy measures (E64) | Employment stability (J63) |
| Crisis (H12) | Unemployment (J64) |
| Financial status and family responsibilities (D14) | Likelihood of layoffs (J63) |
| Firm characteristics (L25) | Likelihood of layoffs (J63) |