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, Revised in December 2020
NBER Program(s):Health Care, Health Economics, Labor Studies

We make several contributions to understanding the socio-demographic ramifications of the COVID-19 epidemic and policy responses on employment outcomes of subgroups in the U.S., benchmarked against two previous recessions. First, monthly Current Population Survey (CPS) data show greater declines in employment in April and May 2020 (relative to February) for Hispanics, younger workers, and those with high school degrees and some college. Between April and May, all the demographic subgroups considered regained some employment. Re-employment in May was broadly proportional to the employment drop that occurred through April, except for Blacks. Second, we show that job loss was larger in occupations that require more interpersonal contact and that cannot be performed remotely. Third, we show that the extent to which workers in various demographic groups sort (pre-COVID-19) into occupations and industries can explain a sizeable portion of the gender, race, and ethnic gaps in recent unemployment. However, there remain substantial unexplained differences in employment losses across groups. We also demonstrate the importance of tracking workers who report having a job but are absent from work, in addition to tracking employed and unemployed workers. We conclude with a discussion of policy priorities and future research needs implied by the disparities in labor market losses from the COVID-19 crisis that we identify.

Acknowledgments and Disclosures

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Document Object Identifier (DOI): 10.3386/w27132