The U.S. Labor Market During the Beginning of the Pandemic Recession

52 Pages Posted: 18 May 2020

See all articles by Tomaz Cajner

Tomaz Cajner

Board of Governors of the Federal Reserve System

Leland Dod Crane

Board of Governors of the Federal Reserve System

Ryan Decker

Board of Governors of the Federal Reserve System

John Grigsby

University of Chicago

Adrian Hamins-Puertolas

Board of Governors of the Federal Reserve System

Erik Hurst

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Christopher Johann Kurz

Board of Governors of the Federal Reserve System

Ahu Yildirmaz

Automatic Data Processing, Inc. (ADP)

Multiple version iconThere are 2 versions of this paper

Date Written: May 2020

Abstract

Using weekly administrative payroll data from the largest U.S. payroll processing company, we measure the evolution of the U.S. labor market during the first four months of the global COVID-19 pandemic. After aggregate employment fell by 21 percent through late-April, employment rebounded somewhat through late-June. The re-opening of temporarily shuttered businesses contributed significantly to the employment rebound, particularly for smaller businesses. We show that worker recall has been an important component of recent employment gains for both re-opening and continuing businesses. Employment losses have been concentrated disproportionately among lower wage workers; as of late June employment for workers in the lowest wage quintile was still 20 percent lower relative to mid-February levels. As a result, average base wages increased between February and June, though this increase arose entirely through a composition effect. Finally, we document that businesses have cut nominal wages for almost 7 million workers while forgoing regularly scheduled wage increases for many others.

Suggested Citation

Cajner, Tomaz and Crane, Leland Dod and Decker, Ryan and Grigsby, John and Hamins-Puertolas, Adrian and Hurst, Erik and Kurz, Christopher Johann and Yildirmaz, Ahu, The U.S. Labor Market During the Beginning of the Pandemic Recession (May 2020). NBER Working Paper No. w27159, Available at SSRN: https://ssrn.com/abstract=3603789

Tomaz Cajner (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Leland Dod Crane

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Ryan Decker

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

John Grigsby

University of Chicago ( email )

Adrian Hamins-Puertolas

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Erik Hurst

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Christopher Johann Kurz

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551

Ahu Yildirmaz

Automatic Data Processing, Inc. (ADP) ( email )

Roseland, NJ
United States

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