Determinants of Disparities in Covid-19 Job Losses

66 Pages Posted: 12 May 2020 Last revised: 21 Aug 2022

See all articles by Laura Montenovo

Laura Montenovo

Indiana University

Xuan Jiang

The Ohio State University

Felipe Lozano-Rojas

University of Georgia

Ian M. Schmutte

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics

Kosali Ilayperuma Simon

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA); National Bureau of Economic Research (NBER)

Bruce A. Weinberg

Ohio State University (OSU) - Economics; IZA Institute of Labor Economics; National Bureau of Economic Research (NBER)

Coady Wing

Indiana University

Date Written: May 2020

Abstract

We make several contributions to understanding the socio-demographic divide in early labor market responses to the U.S. COVID-19 epidemic and its policies, benchmarked against two previous recessions. First, monthly Current Population Survey (CPS) data show greater declines in employment in April and May 2020 (relative to February) for Hispanics, younger workers, and those with high school degrees and some college. Between April and May, all the demographic subgroups considered regained some employment. Re-employment in May was broadly proportional to the employment drop that occurred through April, except for Blacks who experienced a smaller rebound. Further, we show that compared to the 2001 recession and the Great Recession, employment losses in the early COVID-19 recession were smaller for groups with very low or very high (vs. medium) education. Second, we show that job loss was larger in occupations that require more interpersonal contact and that cannot be performed remotely. Third, we find pre-COVID-19 sorting of workers into occupations and industries along demographic lines can explain a sizeable portion of the gender, race, and ethnic gaps in new unemployment. For example, while women did suffer more job losses than men, their disproportionate pre-epidemic sorting into remote work compatible occupations shielded women from what would have been even larger employment losses during the epidemic. However, there remain substantial gaps in employment losses across groups that cannot be explained by socio-economic differences. We find some larger gaps in labor market impacts when we consider the “employed but absent from work” measure present in the CPS, in addition to the more traditional employment and unemployment measures. We conclude with a discussion of policy lessons and future research needs implied by the disparities in early labor market losses from the COVID-19 crisis.

Suggested Citation

Montenovo, Laura and Jiang, Xuan and Lozano-Rojas, Felipe and Schmutte, Ian M. and Simon, Kosali Ilayperuma and Weinberg, Bruce A. and Wing, Coady, Determinants of Disparities in Covid-19 Job Losses (May 2020). NBER Working Paper No. w27132, Available at SSRN: https://ssrn.com/abstract=3597864

Laura Montenovo (Contact Author)

Indiana University

107 S Indiana Ave
100 South Woodlawn
Bloomington, IN 47405
United States

Xuan Jiang

The Ohio State University ( email )

United States

Felipe Lozano-Rojas

University of Georgia ( email )

Baldwin Hall, 355 S Jackson St
204
Athens, GA 30602
United States
812 9296717 (Phone)

HOME PAGE: http://felipelozanorojas.com

Ian M. Schmutte

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics ( email )

Athens, GA 30602-6254
United States

HOME PAGE: http://people.terry.uga.edu/schmutte/

Kosali Ilayperuma Simon

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Bruce A. Weinberg

Ohio State University (OSU) - Economics ( email )

410 Arps Hall
1945 N. High St.
Columbus, OH 43210-1172
United States
614-292-6701 (Phone)
614-292-3906 (Fax)

IZA Institute of Labor Economics

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

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Coady Wing

Indiana University ( email )

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