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Long-Term Employment Effects from Job Losses during the COVID-19 Crisis? A Comparison to the Great Recession and Its Slow Recovery

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  • Till von Wachter

Abstract

This paper compares predictions for the long-term reductions in the employment-to-population (EPOP) ratio based on estimates of the overall job-loss rate and the long-term effects of job loss with the actual evolution of the EPOP ratio. It took about ten years after the end of the Great Recession for the EPOP ratio to recover from substantial reductions partly implied by job-loss effects. Based on job loss during the COVID-19 crisis through July, the prediction is that 15–37 percent of the reduction of the EPOP ratio in December 2020 is permanent.

Suggested Citation

  • Till von Wachter, 2021. "Long-Term Employment Effects from Job Losses during the COVID-19 Crisis? A Comparison to the Great Recession and Its Slow Recovery," AEA Papers and Proceedings, American Economic Association, vol. 111, pages 481-485, May.
    • Handle: RePEc:aea:apandp:v:111:y:2021:p:481-85
    DOI: 10.1257/pandp.20211091
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    Citations

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    Cited by:

    1. Cirera,Xavier & Vargas Da Cruz,Marcio Jose & Grover,Arti Goswami & Iacovone,Leonardo & Medvedev,Denis & Pereira Lopez,Mariana De La Paz & Reyes,Santiago, 2021. "Firm Recovery during COVID-19 : Six Stylized Facts," Policy Research Working Paper Series 9810, The World Bank.
    2. Albanese, Andrea & Cockx, B. & Dejemeppe, Muriel, 2023. "Long-term effects of hiring subsidies for low-educated unemployed youths," ROA Research Memorandum 002, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    3. Larrimore, Jeff & Mortenson, Jacob & Splinter, David, 2022. "Earnings shocks and stabilization during COVID-19," Journal of Public Economics, Elsevier, vol. 206(C).
    4. Andrea Albanese & Bart Cockx & Muriel Dejemeppe, 2022. "Long-Term Effects of Hiring Subsidies for Unemployed Youths—Beware of Spillovers," CESifo Working Paper Series 9972, CESifo.

    More about this item

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • G01 - Financial Economics - - General - - - Financial Crises
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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