Employment during the COVID-19 Pandemic: Collapse and Early Recovery

Abstract

We use monthly Current Population Survey data to document employment changes during the COVID-19 pandemic at the occupation, industry, and metropolitan statistical area (MSA) levels. Over March-April 2020, jobs losses are larger for occupations with higher physical proximity or lower work-from-home feasibility, especially for lower-paying occupations. Nonessential industries also see greater declines in employment. Such occupational and industrial susceptibility to COVID-19 contributes to the variation in employment changes across MSAs: Employment shrinks more for MSAs with larger pre-crisis fractions of workers employed in occupations with higher infection risk. Over April-June 2020, occupations and industries that are hit harder recoup more jobs, but the recovery is only partial. Moreover, the gains are concentrated in lower-paying occupations and a few industries. Taken together, these abrupt changes in employment following the COVID-19 outbreak are unprecedented and potentially have long-term implications for occupational inequality and regional disparity.

Keywords: COVID-19, employment, Great Recession, regional disparity, wage inequality

JEL Classification: E24, G01, I10, J21, J23, J31, L60, L80, R12, R13