Labor Markets During the COVID-19 Crisis: A Preliminary View

By Olivier Coibion, Y. Gorodnichenko, Michael Weber. Social Science Research Network, 2020

654 citations recorded by the source corpus.

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 8th, 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. Early retirement almost fully explains the drop in labor force participation both for those survey participants previously employed and those previously looking for work.

Subfields: Economics and Econometrics, Modeling and Simulation

View Paper: https://www.semanticscholar.org/paper/19db58fa9f390fcc1a27110988fde0c9291b3d48

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Citations in the corpus

The Effects of COVID-19 on U.S. Small Businesses: Evidence from Owners, Managers, and Employees (2020, positive): “Less than a quarter of our unemployed respondents were actively looking for a job (columns (4)–(6)), consistent with Coibion et al. (2020c), who show that many who lost jobs during the pandemic were not actively looking for a new one.”
Does COVID-19 open a Pandora's box of changing the connectedness in energy commodities? (2020, neutral): “Some pieces of researches detected the impact process of COVID-19 on the financial system (Papadamou et al., 2020; Zhang et al., 2020a; Coibion et al., 2020).”
A literature review of the economics of COVID‐19 (2020, neutral): “Coibion et al. (2020b) find that the level of unemployment and job losses in the United States is more severe than onemight judge based on the rise in UI claims, which is to be expected given the low coverage rate of the UI regimes in the United States.”
Sheltering in place and domestic violence: Evidence from calls for service during COVID-19 (2020, positive): “Tens of millions of workers lost jobs or worked fewer hours (Cajner et al., 2020; Coibion et al., 2020; Cowan, 2020), and demand for new workers fell nearly 30% (Kahn et al.”
Who suffers from the COVID-19 shocks? Labor market heterogeneity and welfare consequences in Japan (2020, background): “5Other papers that document and study early responses to the COVID-19 shocks in the U.S. labor market include Coibion et al. (2020), Gregory et al. (2020) and Kahn et al. (2020). complements the literature by documenting facts and analyzing welfare consequences in Japan.”
Aggregate and Firm-Level Stock Returns During Pandemics, in Real Time (2020, neutral): “It also relates to the labor market studies of Cajner et al. (2020) and Coibion et al. (2020), which analyze employment trends during COVID-19, and the examinations of labor market interactions during COVID-19 more directly in Humphries et al. (2020) and Bartik et al. (2020).”
Effects of social distancing policy on labor market outcomes (2020, positive): “However, note that Coibion et al. (2020a) use data from an early-April household survey and find that unemployment rate may greatly exceed unemployment insurance claims.”
Market reactions to the arrival and containment of COVID-19: An event study (2020, neutral): “The recent changes in asset prices (Gormsen and Koijen, 2020) and expectations (Coibion et al., 2020; Hanspal et al., 2020) suggest that the pandemic’s effects are not regarded to be temporary (Zechner et al.”
The Cost of the Covid-19 Crisis: Lockdowns, Macroeconomic Expectations, and Consumer Spending (2020, positive): “Coibion et al. (2020) also use Nielsen surveys to study the effect of the pandemic on labor markets and find large drops in labor-force participation due to a wave of early retirements.”
Disaster Resilience and Asset Prices (2020, neutral): “The effects of the pandemic are widely perceived not to be purely transient, as witnessed by current changes in expectations (Coibion et al., 2020b; Hanspal et al., 2020; Coibion et al., 2020a) and in asset prices (Gormsen and Koijen, 2020).”
COVID-19 pandemic and unemployment dynamics in European economies (2021, background): “In a similar context for the USA economy, Coibion et al. (2020) revealed that most of the workers suffering from job losses are no longer looking for work.”