How does the COVID-19 pandemic affect regional labour markets and why do large cities suffer most?

Silke Hamann, Annekatrin Niebuhr, Duncan Roth and Georg Sieglen
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Silke Hamann: Institute for Employment Research (IAB), Nuremberg, Germany
Georg Sieglen: Institute for Employment Research (IAB), Nuremberg, Germany

No 202303, IAB-Discussion Paper from Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]

Abstract: "We estimate spatially heterogeneous effects of the COVID-19 pandemic on labour market dynamics in Germany until December 2021. While initially slightly larger in rural regions, adverse effects quickly become more pronounced and persistent in large agglomerations. We ascribe the larger impact of the pandemic in large agglomerations to two factors. First, a combination of a higher share of skilled workers and jobs suitable for working-from-home is positively related to an increased inflow rate into unemployment. We argue that spillover effects from reduced product market demand in large cities caused by changes in behaviour such as working-from-home or online shopping are a possible explanation. Second, a higher pre-crisis unemployment rate in large agglomerations is associated with a lower outflow rate out of unemployment. This might reflect the less favourable composition of unemployment in large cities which reduces the probability of transitions into employment during crises." (Author's abstract, IAB-Doku) ((en))

Keywords: Bundesrepublik Deutschland; Pandemie; IAB-Open-Access-Publikation; Auswirkungen; Ballungsraum; Beschäftigungseffekte; E-Commerce; Großstadt; Gütermarkt; Arbeitslosigkeitsentwicklung; Informationswirtschaft; Kleinstadt; ländlicher Raum; Nachfrageentwicklung; regionaler Arbeitsmarkt; regionaler Vergleich; qualifikationsspezifische Faktoren; mobiles Arbeiten; Stadtregion; Telearbeit; Arbeitslosigkeit; Arbeitsmarktentwicklung; Zu- und Abgänge; 2017-2021 (search for similar items in EconPapers)
JEL-codes: J23 J63 R23 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2023-03-03
New Economics Papers: this item is included in nep-geo, nep-lma and nep-ure
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Citations: View citations in EconPapers (3)

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https://doi.org/10.48720/IAB.DP.2303

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Journal Article: How does the Covid‐19 pandemic affect regional labor markets and why do large cities suffer most? (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:iab:iabdpa:202303

DOI: 10.48720/IAB.DP.2303

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