Working Paper: NBER ID: w27017
Authors: Olivier Coibion; Yuriy Gorodnichenko; Michael Weber
Abstract: We use a repeated large-scale survey of households in the Nielsen Homescan panel to characterize how labor markets are being affected by the covid-19 pandemic. We document several facts. First, job loss has been significantly larger than implied by new unemployment claims: we estimate 20 million lost jobs by April 6th, far more than jobs lost over the entire Great Recession. Second, many of those losing jobs are not actively looking to find new ones. As a result, we estimate the rise in the unemployment rate over the corresponding period to be surprisingly small, only about 2 percentage points. Third, participation in the labor force has declined by 7 percentage points, an unparalleled fall that dwarfs the three percentage point cumulative decline that occurred from 2008 to 2016.
Keywords: Labor Markets; COVID-19; Unemployment; Labor Force Participation
JEL Codes: C83; D84; E31; J21; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| COVID-19 pandemic (H12) | job loss (J63) |
| job loss (J63) | unemployment rate changes (J64) |
| job loss (J63) | labor force participation rate changes (J49) |
| unemployment rate changes (J64) | labor force participation rate changes (J49) |
| job loss (J63) | individuals not seeking employment (J68) |
| health concerns related to COVID-19 (I14) | retirement as a reason for not seeking work (J26) |