COVID-19 Is a Persistent Reallocation Shock

11 Pages Posted: 20 Apr 2021

See all articles by Jose Maria Barrero

Jose Maria Barrero

ITAM - Business School

Nicholas Bloom

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

Steven J. Davis

University of Chicago; National Bureau of Economic Research (NBER); Hoover Institution

Brent Meyer

Federal Reserve Banks - Federal Reserve Bank of Atlanta

Multiple version iconThere are 2 versions of this paper

Date Written: January 2021

Abstract

Drawing on data from the firm-level Survey of Business Uncertainty, we present three pieces of evidence that COVID-19 is a persistent reallocation shock. First, rates of excess job and sales reallocation over 24-month periods have risen sharply since the pandemic struck, especially for sales. We compute these rates by aggregating over monthly firm-level observations that look back 12 months and ahead 12 months. Second, as of December 2020, firm-level forecasts of sales revenue growth over the next year imply a continuation of recent changes, not a reversal. Third, COVID-19 shifted relative employment growth trends in favor of industries with a high capacity of employees to work from home and against those with a low capacity.

Keywords: COVID-19, reallocation shock, business expectations, working from home, Survey of Business Uncertainty

JEL Classification: D22, D84, E23, E24, J21, J62

Suggested Citation

Barrero, Jose Maria and Bloom, Nicholas and Davis, Steven J. and Meyer, Brent H., COVID-19 Is a Persistent Reallocation Shock (January 2021). FRB Atlanta Working Paper No. 2021-3, Available at SSRN: https://ssrn.com/abstract=3830059

Jose Maria Barrero

ITAM - Business School ( email )

Rio Hondo No. 1
Col. Tizapan-San Angel Alc. Alvaro Obregon
Ciudad de Mexico, 01000
Mexico

Nicholas Bloom

Stanford University - Department of Economics ( email )

Landau Economics Building, Room 231
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Stanford, CA 94305-6072
United States
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HOME PAGE: http://economics.stanford.edu/faculty/bloom

National Bureau of Economic Research (NBER) ( email )

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Steven J. Davis

University of Chicago ( email )

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Chicago, IL 60637
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773-702-7312 (Phone)
773-702-0458 (Fax)

National Bureau of Economic Research (NBER)

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Hoover Institution

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Stanford University
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Brent H. Meyer (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Atlanta ( email )

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Atlanta, GA 30309-4470
United States

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