Vacancy posting, firm balance sheets, and pandemic policy

Abstract

We assess how balance sheets propagated labour demand shocks during Covid-19 using novel matched data on firms and online job postings. Exploiting regional and firm-level variation in three pandemic policies in the UK, we find that financially healthy firms increased vacancies more in response to positive shocks. Less-leveraged firms and firms with higher credit scores increased postings more in response to the Eat Out to Help Out’s local demand subsidies and after receiving a Bounce Back Loan Scheme loan, respectively. These findings complement the link between leverage and employment losses in response to negative shocks.

Keywords: Covid-19, recession, vacancies, Indeed, job postings, job ads, heterogeneity, firm, firm-level, balance sheets, industry, big data, alternative data, labour market, natural language processing

JEL Classification: C5, D2, G3, H1, J2, J6