Working Remotely and the Supply-Side Impact of COVID-19

65 Pages Posted: 2 Jun 2020 Last revised: 9 Nov 2020

Multiple version iconThere are 2 versions of this paper

Date Written: November 2, 2020


We analyze the supply-side disruptions associated with COVID-19 using differences in the ability of workers to work remotely. Sectors in which a higher fraction of the workforce is not able to work remotely experienced greater declines in employment and expected revenue growth, worse stock market performance, and higher likelihood of default. Lower-paid workers, especially female workers with young children, were significantly more affected by these disruptions. The stock market overweighs low-exposure industries, helping explain the disconnect between stock market indices and aggregate outcomes. Further, we find evidence that the Paycheck Protection Program provided less relief per-employee to the most exposed sectors. Finally, we combine these ex-ante heterogeneous industry exposures with daily financial market data to create a stock return portfolio that most closely replicates the supply-side disruptions resulting from the pandemic.

Suggested Citation

Papanikolaou, Dimitris and Schmidt, Lawrence, Working Remotely and the Supply-Side Impact of COVID-19 (November 2, 2020). Available at SSRN: or

Dimitris Papanikolaou (Contact Author)

Northwestern University - Kellogg School of Management - Department of Finance ( email )

Evanston, IL 60208
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Lawrence Schmidt

MIT Sloan School of Management ( email )

77 Massachusetts Avenue
Cambridge, MA 02139-4307
United States

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