The Impact of Covid-19 on Productivity

By Nicholas Bloom, P. Bunn, P. Mizen, Pawel Smietanka, Gregory Thwaites. Review of Economics and Statistics, 2020

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Abstract We analyze the impact of Covid-19 on productivity using data from an innovative monthly firm survey that asks for quantitative impacts of Covid-19 on inputs and outputs. We find that total factor productivity (TFP) fell by up to 6% during 2020–2021. The overall impact combined large reductions in ‘within-firm’ productivity, with 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.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/59d7ef60bba85686469de6b5cc7502b38830ba23