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On the heterogeneous impacts of the COVID-19 lockdown on US unemployment

Author

Listed:
  • Malak Kandoussi

    (EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay)

  • François Langot

    (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université, IUF - Institut universitaire de France - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics)

Abstract

We develop a matching model that predicts the impact of the COVID-19 lockdown on US unemployment, while accounting for the contrasted impacts across various job types. The model is calibrated on the subprime experience and is then used to identify the job-specific lockdown shocks, using observed worker flows by diploma. The model persistence-which is significantly larger than in the Diamond-Mortensen-Pissarides model-is dampened by CARES act that facilitates the use of temporary separations. Counterfactual experiments show that time-varying risk, hiring cost externalities, and wage rigidity are needed to account for these crises.

Suggested Citation

  • Malak Kandoussi & François Langot, 2021. "On the heterogeneous impacts of the COVID-19 lockdown on US unemployment," Working Papers hal-03107369, HAL.
    • Handle: RePEc:hal:wpaper:hal-03107369
    Note: View the original document on HAL open archive server: https://hal.science/hal-03107369
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    References listed on IDEAS

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    Keywords

    COVID-19; Unemployment; search and matching; Worker heterogeneity;
    All these keywords.

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