On the heterogeneous impacts of the COVID-19 lockdown on US unemployment

Malak Kandoussi () and Francois Langot
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Malak Kandoussi: EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay

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Abstract: We develop a matching model that predicts the impact of the COVID-19 lockdown on US unemployment, while accounting for the contrasted impacts across various job types. The model is calibrated on the subprime experience and is then used to identify the job-specific lockdown shocks, using observed worker flows by diploma. The model persistence-which is significantly larger than in the Diamond-Mortensen-Pissarides model-is dampened by CARES act that facilitates the use of temporary separations. Counterfactual experiments show that time-varying risk, hiring cost externalities, and wage rigidity are needed to account for these crises.

Keywords: COVID-19; Unemployment; search and matching; Worker heterogeneity (search for similar items in EconPapers)
Date: 2021-01-12
New Economics Papers: this item is included in nep-dge
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Working Paper: On the heterogeneous impacts of the COVID-19 lockdown on US unemployment (2021)
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