Even if the crisis is resolved quickly, many pandemic-induced shifts in consumer demand and business will linger. Therefore, they conclude that the reallocation of labor is likely to persist and estimate that 42% of recent pandemic-induced layoffs will result in permanent job loss.
The Hutchins Institute says that with large parts of the economy shut down, some firms are expanding in response to pandemic-induced demand shifts. Jose Maria Barrero from the Autonomous Technological Institute of Mexico, Steven J. Davis from the University of Chicago, and Nicholas Bloom from Stanford find that the COVID-19 shock caused three new hires in the near term for every 10 layoffs.
Using firm-level employment and sales forecasts at a one-year horizon in the Survey of Business Uncertainty, they create forward-looking measures of the reallocation of jobs and sales.
Comparing changes to firms’ expectations before and after the onset of the pandemic, they find that the expected reallocation rate— the volume of cross-firm reallocation in excess of the amount needed to accommodate the aggregate net change—is 2.4 times larger than the pre-COVID average for jobs. Worse, it is 3.9 times larger than the pre-COVID average for sales.
The authors say that even if the crisis is resolved quickly, many pandemic-induced shifts in consumer demand and business will linger. Therefore, they conclude that the reallocation of labor is likely to persist and estimate that 42% of recent pandemic-induced layoffs will result in permanent job loss.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
Half of Pandemic Layoffs Will Result in Permanent Job Loss
Even if the crisis is resolved quickly, many pandemic-induced shifts in consumer demand and business will linger. Therefore, they conclude that the reallocation of labor is likely to persist and estimate that 42% of recent pandemic-induced layoffs will result in permanent job loss.
The Hutchins Institute says that with large parts of the economy shut down, some firms are expanding in response to pandemic-induced demand shifts. Jose Maria Barrero from the Autonomous Technological Institute of Mexico, Steven J. Davis from the University of Chicago, and Nicholas Bloom from Stanford find that the COVID-19 shock caused three new hires in the near term for every 10 layoffs.
Using firm-level employment and sales forecasts at a one-year horizon in the Survey of Business Uncertainty, they create forward-looking measures of the reallocation of jobs and sales.
Comparing changes to firms’ expectations before and after the onset of the pandemic, they find that the expected reallocation rate— the volume of cross-firm reallocation in excess of the amount needed to accommodate the aggregate net change—is 2.4 times larger than the pre-COVID average for jobs. Worse, it is 3.9 times larger than the pre-COVID average for sales.
The authors say that even if the crisis is resolved quickly, many pandemic-induced shifts in consumer demand and business will linger. Therefore, they conclude that the reallocation of labor is likely to persist and estimate that 42% of recent pandemic-induced layoffs will result in permanent job loss.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.