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Determinants of Disparities in Covid-19 Job Losses

Laura Montenovo, Xuan Jiang, Felipe Lozano Rojas, Ian M. Schmutte, Kosali I. Simon, Bruce A. Weinberg, Coady Wing

NBER Working Paper No. 27132
Issued in May 2020
NBER Program(s):Health Care, Health Economics, Labor Studies

We make several contributions to understanding how the COVID-19 epidemic and policy responses have affected U.S. labor markets, benchmarked against two previous recessions. First, monthly Current Population Survey (CPS) data show greater declines in employment in April 2020 (relative to February) for Hispanics, workers aged 20 to 24, and those with high school degrees and some college. Second, we show that job loss was larger in occupations that require more interpersonal contact and that cannot be performed remotely. Pre-epidemic sorting into occupations with more potential for remote work and industries that are currently essential explain a large share of gaps in recent unemployment for key racial, ethnic, age, and education sub-populations. However, there is a larger unexplained component to the gender employment gaps. We also address measurement issues known to have affected the March and April 2020 CPS. In particular, non-response increased dramatically, especially among the incoming rotation groups. Some of the increase appears non-random, but is not likely to be driving our conclusions. We also demonstrate the importance of tracking workers who report having a job but being absent, in addition to tracking employed and unemployed workers. We conclude with a discussion of policy priorities implied by the disparities in labor market losses from the COVID-19 crisis that we identify.

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Document Object Identifier (DOI): 10.3386/w27132

 
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