Nature of Work and Distribution of Risk: Evidence from Occupational Sorting, Skills, and Tasks

CEPR Covid Economics: Vetted and Real Time Papers, Vol. 34, pp. 15-49 (2020)

35 Pages Posted: 9 Jul 2020 Last revised: 22 Jul 2020

See all articles by Egor Malkov

Egor Malkov

University of Minnesota - Twin Cities - Department of Economics

Date Written: June 25, 2020

Abstract

How does the nature of work — teleworkability and contact intensity — shape the distribution of health, labor income, and unemployment risks, created by the COVID-19 pandemic? To answer this question, we consider two contexts. First, we show that the existing spousal nature-of-work-based occupational sorting in the United States matters for the distribution of these risks. In particular, we show that it mitigates the risk of catching COVID-19 through intra-household contagion relative to the case of zero sorting. Furthermore, we show that it creates a larger fraction of couples, who are excessively exposed to labor income and unemployment risks, relative to the case of zero sorting. Second, we document that teleworkable occupations require higher education and experience levels as well as greater cognitive, social, character, and computer skills relative to non-teleworkable occupations. This discrepancy affects labor income and unemployment risks by increasing the likelihood of skill mismatch for newly unemployed workers. Our results imply that the current economic downturn may have long-run effects on employment prospects and earnings of workers who had non-teleworkable or high-contact-intensity jobs at the onset of the COVID-19 outbreak. We discuss the relevant policy implications and associated policy constraints that follow from our findings.

Keywords: Teleworkability, Couples, Skills, Tasks, Labor Market Mobility, COVID-19

JEL Classification: J22, J23, J24, J63, J81

Suggested Citation

Malkov, Egor, Nature of Work and Distribution of Risk: Evidence from Occupational Sorting, Skills, and Tasks (June 25, 2020). CEPR Covid Economics: Vetted and Real Time Papers, Vol. 34, pp. 15-49 (2020), Available at SSRN: https://ssrn.com/abstract=3643287 or http://dx.doi.org/10.2139/ssrn.3643287

Egor Malkov (Contact Author)

University of Minnesota - Twin Cities - Department of Economics ( email )

1925 Fourth Street South
Minneapolis, MN 55455
United States

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