NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Working Remotely and the Supply-side Impact of Covid-19

Dimitris Papanikolaou, Lawrence D.W. Schmidt

NBER Working Paper No. 27330
Issued in June 2020
NBER Program(s):Asset Pricing, Corporate Finance, Economic Fluctuations and Growth, Labor Studies, Productivity, Innovation, and Entrepreneurship

We analyze the supply-side disruptions associated with Covid-19 across firms and workers. To do so, we exploit differences in the ability of workers across industries to work remotely using data from the American Time Use Survey (ATUS). We find that sectors in which a higher fraction of the workforce is not able to work remotely experienced significantly greater declines in employment, significantly more reductions in expected revenue growth, worse stock market performance, and higher expected likelihood of default. In terms of individual employment outcomes, lower-paid workers, especially female workers with young children, were significantly more affected by these disruptions. Last, we combine these ex-ante heterogeneous industry exposures with daily financial market data to create a stock return portfolio that most closely replicate the supply-side disruptions resulting from the pandemic.

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Document Object Identifier (DOI): 10.3386/w27330

 
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