The Impact of Covid-19 on Productivity

52 Pages Posted: 21 Dec 2020 Last revised: 18 Jul 2022

See all articles by Nicholas Bloom

Nicholas Bloom

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Philip Bunn

Bank of England

Paul Mizen

University of Nottingham; Bank of England; Centre for Economic Policy Research (CEPR)

Pawel Smietanka

Bank of England

Greg Thwaites

University of Nottingham

Multiple version iconThere are 2 versions of this paper

Date Written: December 2020

Abstract

We analyse the impact of Covid-19 on productivity using data from an innovative monthly firm survey panel that asks for quantitative impacts of Covid on inputs and outputs. We find total factor productivity (TFP) fell by up to 5% during 2020-21. The overall impact combined large reductions in ‘within-firm’ productivity, with an offsetting positive ‘between-firm’ effects as less productive sectors, and less productive firms within them, contracted. Despite these large pandemic effects, firms’ post-Covid forecasts imply surprisingly little lasting impact on aggregate TFP. We also see significant heterogeneity over firms and sectors, with the greatest impacts in those requiring extensive in-person activity. We also ask about unmeasured inflation in the form of deteriorating product quality, finding an additional 1.4% negative impact on TFP.

Suggested Citation

Bloom, Nicholas and Bunn, Philip and Mizen, Paul and Smietanka, Pawel and Thwaites, Greg, The Impact of Covid-19 on Productivity (December 2020). NBER Working Paper No. w28233, Available at SSRN: https://ssrn.com/abstract=3753143

Nicholas Bloom (Contact Author)

Stanford University - Department of Economics ( email )

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Philip Bunn

Bank of England ( email )

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Paul Mizen

University of Nottingham ( email )

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Bank of England

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Centre for Economic Policy Research (CEPR)

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United Kingdom

Pawel Smietanka

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Greg Thwaites

University of Nottingham

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