Research / BFI Working PaperAug 03, 2020

Measuring the Labor Market at the Onset of the COVID-19 Crisis

Alexander W. Bartik, Marianne Bertrand, Feng Lin, Jesse Rothstein, Matthew Unrath

We use traditional and non-traditional data to measure the collapse and partial recovery of the U.S. labor market from March to early July, contrast this downturn to previous recessions, and provide preliminary evidence on the effects of the policy response. For hourly workers at both small and large businesses, nearly all of the decline in employment occurred between March 14 and 28. It was driven by low-wage services, particularly the retail and leisure and hospitality sectors. A large share of the job losses in small businesses reflected firms that closed entirely, though many subsequently reopened. Firms that were already unhealthy were more likely to close and less likely to reopen, and disadvantaged workers were more likely to be laid off and less likely to return. Most laid off workers expected to be recalled, and this was predictive of rehiring. Shelter-in-place orders drove only a small share of job losses. Last, states that received more small business loans from the Paycheck Protection Program and states with more generous unemployment insurance benefits had milder declines and faster recoveries. We find no evidence that high UI replacement rates drove job losses or slowed rehiring.

This paper was released as part of the Brookings Papers on Economic Activity, scheduled for June 25, 2020.

More Research From These Scholars

BFI Working Paper Apr 12, 2021

Do Workfare Programs Live Up to Their Promises? Experimental Evidence from Cote D’Ivoire

Marianne Bertrand, Bruno Crépon, Alicia Marguerie, Patrick Premand
Topics:  Employment & Wages
BFI Working Paper Mar 12, 2019

Improving Educational Pathways to Social Mobility: Evidence from Norway’s “Reform 94”

Marianne Bertrand, Magne Mogstad, Jack Mountjoy
Topics:  Higher Education & Workforce Training
BFI Working Paper Apr 13, 2020

How Are Small Businesses Adjusting to COVID-19? Early Evidence from a Survey

Alexander W. Bartik, Marianne Bertrand, Zoë B. Cullen, Edward L. Glaeser, Michael Luca, Christopher T. Stanton
Topics:  COVID-19