Distributional Impacts of Recessions: The COVID-19 Epidemic Recession and the Global Financial Crisis
Keywords:Labor Market Dynamics, Current Population Survey, COVID-19 Pandemic, Gross Worker Flows, Distributional Impact
This study helps us understand the similarities and differences between the distributional impacts of the COVID-19 pandemic and the Global Financial Crisis by breaking them down into four categories: (i) worker characteristics; (ii) job characteristics; and (iii) flexible/work-from-home jobs and essential jobs, which were exempt from government-mandated shutdowns during this recession. In the past, recessions have hurt younger and less educated workers more, but the Pandemic Recession hit women and people of Hispanic heritage especially hard. Jobs that require a certain amount of adaptability, social interaction, and a need seem to be less affected by changes in the economy. The non-cyclical character of this employment has historically been caused by the rising share of skilled people in highly adaptable occupations. When the Pandemic Crisis hit, however, it was the flexible and crucial occupations that were hit most, rather than the social service sector. Both recessions have had a significant distributional effect, since low-income people have been hit more than high-income ones. Finally, in contrast to the Great Crisis of 2008–2009, many people who lost their jobs during the COVID-19 recession were only out of work temporarily.
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