Working Paper: NBER ID: w27131
Authors: Annette Alstadster; Bernt Bratsberg; Gaute Eielsen; Wojciech Kopczuk; Simen Markussen; Oddbjorn Raaum; Knut Red
Abstract: Using real-time register data we document the magnitude, dynamics and socio-economic characteristics of the crisis-induced temporary and permanent layoffs in Norway. We find evidence that the effects of social distancing measures quickly spread to industries that were not directly affected by policy. Close to 90% of layoffs are temporary, although this classification may change as the crisis progresses. Still, there is suggestive evidence of immediate stress on a subset of firms that manifests itself in permanent rather than temporary layoffs. We find that the shock had a strong socio-economic gradient, hit a financially vulnerable population, and parents with younger children, and was driven by layoffs in smaller, less productive, and financially weaker firms. Consequently though, the rise in unemployment likely overstates the loss of output associated with the layoffs by about a third.
Keywords: COVID-19; layoffs; socioeconomic characteristics; Norway
JEL Codes: E24; J11; J4; J6
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| COVID-19 crisis (H12) | layoffs in Norway (J63) |
| layoffs in sectors affected by policy measures (J63) | layoffs in other industries (J63) |
| socioeconomic gradient of layoffs (J63) | impact on financially vulnerable populations (F65) |
| layoffs (J63) | unemployment (J64) |
| characteristics of firms (size, productivity) (L25) | layoffs (J63) |
| demographic characteristics of workers (J21) | layoffs (J63) |