The Distributional Impact of Recessions: the Global Financial Crisis and the Pandemic Recession

Ippei Shibata

No 2020/096, IMF Working Papers from International Monetary Fund

Abstract: Using the U.S. Current Population Survey data, this paper compares the distributional impacts of the Pandemic Crisis and those of the Global Financial Crisis in terms of (i) worker characteristics, (ii) job characteristics–“social” (where individuals interact to consume goods), “teleworkable” (where individuals have the option of working at home), and “essential” jobs (which were not subject to government mandated shut-downs during the recent recession), and (iii) wage distributions. We find that young and less educated workers have always been affected more in recessions, while women and Hispanics were more severely affected during the Pandemic Recession. Surprisingly, teleworkable, social and essential jobs have been historically less cyclical. This historical acyclicality of teleworkable occupations is attributable to its higher share of skilled workers. Unlike during the Global Financial Crisis, however, employment in social industries fell more whereas employment in teleworkable and essential jobs fell less during the Pandemic Crisis. Lastly, during both recessions, workers at low-income earnings have suffered more than top-income earners, suggesting a significant distributional impact of the two recessions.

Keywords: WP; recession; Pandemic recession; Labor Market Dynamics; Current Population Survey; COVID-19 Pandemic; Gross Worker Flows; Distributional Impact; separation probability; wage quantile; separation rate; log employment; defining job separation probability; recession in terms; workable job; job characteristic; Pandemic x wage quantile; employment statistics; job prospect; Global financial crisis of 2008-2009; Employment; Unemployment rate; Wages; Global; COVID-19 (search for similar items in EconPapers)
Pages: 30
Date: 2020-06-19
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Citations: View citations in EconPapers (18)

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