The U.S. Labor Market During the Beginning of the Pandemic Recession

Tomaz Cajner, Leland Crane, Ryan Decker (), John Grigsby (), Adrian Hamins-Puertolas (), Erik Hurst, Christopher Kurz () and Ahu Yildirmaz ()
Additional contact information
Ryan Decker: Board of Governors of the Federal Reserve System
John Grigsby: University of Chicago
Adrian Hamins-Puertolas: Board of Governors of the Federal Reserve System
Christopher Kurz: Board of Governors of the Federal Reserve System
Ahu Yildirmaz: Automatic Data Processing, Inc. (ADP)

Working Papers from Becker Friedman Institute for Research In Economics

Abstract: Using weekly, anonymized administrative payroll data from the largest U.S. payroll processing company, we measure the deterioration of the U.S. labor market during the first two months of the global COVID-19 pandemic. We find that U.S. private-sector employment contracted by about 22 percent between mid-February and mid-April. Businesses suspending operations—perhaps temporarily—account for a significant share of employment losses, particularly among smaller businesses. Hours worked for continuing workers fell by 4.5 percent. We highlight large differences in employment declines by industry, business size, state of residence, and demographic group. Workers in the bottom quintile of the wage distribution experienced a 35 percent employment decline while those in the top quintile experienced only a 9 percent decline. Large differences across the wage distribution persist even after conditioning on worker age, business industry, business size, and worker location. As a result, average base wages increased by over 5 percent, though this increase arose entirely through a composition effect. Over- all, we document that the speed and magnitude of labor market deterioration during the early parts of the pandemic were unprecedented in the postwar period, particularly for the bottom of the earnings distribution.

Pages: 48 pages
Date: 2020
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Citations: View citations in EconPapers (87)

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Related works:
Journal Article: The US Labor Market during the Beginning of the Pandemic Recession (2020)
Working Paper: The U.S. Labor Market during the Beginning of the Pandemic Recession (2020)
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