ABSTRACT

Initial Impact of COVID-19 on Labor Market Outcomes Across Groups and the Potential for Permanent Scarring   [open pdf - 0B]

From the Introduction: "The arrival of the novel coronavirus in the United States brought with it a public health crisis that meant that previously advantageous ways of organizing work and home life carried new costs. [...] The official unemployment rate peaked at 14.7 percent, but the logistical challenges with measuring a surge in people who were suddenly laid off means that, more realistically, the unemployment rate might have been over 20 percent at its peak. The need to stay home in order to stay safe caused many people who were not currently in the labor force, but who would have started looking for a job in March and April, to put job-finding plans on pause. The data show that new entrants and reentrants to the labor force plummeted both in absolute numbers and as a share of the unemployed. Labor force participation fell to 60.2 percent in April 2020, a low last seen in the early 1970s. [...] A closer look at how job loss unfolded and recovered across different groups provides some insight into what the future may hold for the labor market. Equally, it is important to realize that no one is able to assess the long-term scarring that will occur in the labor market until the pandemic is closer to being resolved. Major sectoral shifts in the workforce will likely be necessary, and while many of those who were hurt initially during the shutdown will bear the brunt of this reallocation, its permanent impact will likely be more narrowly targeted."

Report Number:
Essay 2020-16
Author:
Publisher:
Date:
2020-07
Series:
Copyright:
Hamilton Project
Retrieved From:
Brookings Institution: https://www.brookings.edu/
Media Type:
application/pdf
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