Working Paper: NBER ID: w28233
Authors: Nicholas Bloom; Philip Bunn; Paul Mizen; Pawel Smietanka; Gregory Thwaites
Abstract: We analyse the impact of Covid-19 on productivity using data from an innovative monthly firm survey panel that asks for quantitative impacts of Covid on inputs and outputs. We find total factor productivity (TFP) fell by up to 5% during 2020-21. The overall impact combined large reductions in ‘within-firm’ productivity, with an offsetting positive ‘between-firm’ effects as less productive sectors, and less productive firms within them, contracted. Despite these large pandemic effects, firms’ post-Covid forecasts imply surprisingly little lasting impact on aggregate TFP. We also see significant heterogeneity over firms and sectors, with the greatest impacts in those requiring extensive in-person activity. We also ask about unmeasured inflation in the form of deteriorating product quality, finding an additional 1.4% negative impact on TFP.
Keywords: COVID-19; productivity; total factor productivity; firm survey
JEL Codes: E0; L2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| COVID-19 (I15) | Total Factor Productivity (TFP) (D24) |
| Within-firm productivity reductions (D21) | Total Factor Productivity (TFP) (D24) |
| Unmeasured inflation (deteriorating product quality) (E31) | Total Factor Productivity (TFP) (D24) |
| Higher unit costs (D29) | Within-firm productivity reductions (D21) |
| Lower capacity utilization (D24) | Within-firm productivity reductions (D21) |
| Contraction of low-productivity sectors (E69) | Positive between-firm effects (L25) |