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

22 Pages Posted: 13 Apr 2020 Last revised: 29 Apr 2020

See all articles by Olivier Coibion

Olivier Coibion

University of Texas at Austin

Yuriy Gorodnichenko

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Michael Weber

University of Chicago - Finance

Multiple version iconThere are 4 versions of this paper

Date Written: April 28, 2020

Abstract

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. We find increases in the fraction of those being retired across the whole age distribution with women and blacks driving a large part of the accelerated retirement.

Keywords: labor market, unemployment, employment, COVID-19

JEL Classification: E31, C83, D84, J21, J26

Suggested Citation

Coibion, Olivier and Gorodnichenko, Yuriy and Weber, Michael, Labor Markets During the COVID-19 Crisis: A Preliminary View (April 28, 2020). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2020-41, Chicago Booth Research Paper No. 20-06, Fama-Miller Working Paper , Available at SSRN: https://ssrn.com/abstract=3574736 or http://dx.doi.org/10.2139/ssrn.3574736

Olivier Coibion

University of Texas at Austin ( email )

2317 Speedway
Austin, TX 78712
United States

Yuriy Gorodnichenko

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

HOME PAGE: http://www.econ.berkeley.edu/~ygorodni/index.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Michael Weber (Contact Author)

University of Chicago - Finance ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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