Did COVID-19 induce a reallocation wave?

Agostino Consolo and Filippos Petroulakis
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Agostino Consolo: European Central Bank

No 295, Working Papers from Bank of Greece

Abstract: Recent research has argued that the COVID-19 shock has also brought about a real- location shock. We examine the evidence for such an occurrence in the United States, taking a broad perspective. We first consider micro data from CPS and JOLTS; there is no noticeable uptick in occupation or sector switches, nor churn, either at the aggregate level or the cross-section, or when broken down by firms’ size. We then examine whether mismatch unemployment has risen as a result of the pandemic; using an off-the-shelf multisector search and matching model, there is little evidence for an important role for mismatch in driving the elevated unemployment rate. Finally, we employ a novel Bayesian SVAR framework with sign restrictions to identify a reallocation shock; we find that it has played a relatively minor role in explaining labor market patterns in the pandemic, at least relative to its importance in earlier episodes.

Keywords: Reallocation; COVID-19; mismatch (search for similar items in EconPapers)
JEL-codes: E24 J63 (search for similar items in EconPapers)
Pages: 51
Date: 2022-03
New Economics Papers: this item is included in nep-dge, nep-lab, nep-mac and nep-ure
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Did COVID‐19 induce a reallocation wave? (2024)
Working Paper: Did COVID-19 induce a reallocation wave? (2022)
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