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Labor markets in crisis: The causal impact of Canada's COVD19 economic shutdown on hours worked for workers across the earnings distribution

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  • Koebel, Kourtney
  • Pohler, Dionne

Abstract

We use Statistics Canada's Labour Force Survey to explore the labor market impacts of the novel coronavirus (COVID-19). Specifically, we adopt a unique identification strategy to examine the heterogeneous causal effects of the COVID-19 economic shutdown by governments on hours worked across the earnings distribution in Canada, focusing on individuals who remained employed in March and April. Most early crisis analyses found that workers in the bottom of the earnings distribution experienced a much larger negative shock to hours worked than workers in the top of the earnings distribution. However, some low-income individuals are also working more as a result of the COVID-19 economic shutdown, and this nuance is missed when only considering the net effect. When we condition on whether workers lost or gained hours, we find that workers in the bottom of the earnings distribution experienced not only the largest percentage reduction in hours, but also the largest percentage increase in hours.

Suggested Citation

  • Koebel, Kourtney & Pohler, Dionne, 2020. "Labor markets in crisis: The causal impact of Canada's COVD19 economic shutdown on hours worked for workers across the earnings distribution," CLEF Working Paper Series 25, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    • Handle: RePEc:zbw:clefwp:25
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    References listed on IDEAS

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    1. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    2. Louis‐Philippe Beland & Abel Brodeur & Derek Mikola & Taylor Wright, 2022. "The short‐term economic consequences of COVID‐19: Occupation tasks and mental health in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(S1), pages 214-247, February.
    3. Louis-Philippe Beland & Abel Brodeur & Derek Mikola & Taylor Wright, 2020. "COVID-19, Occupation Tasks and Mental Health in Canada," Carleton Economic Papers 20-07, Carleton University, Department of Economics, revised 30 Jun 2020.
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    Cited by:

    1. Leonardo Fabio Morales & Leonardo Bonilla‐Mejía & Jose Pulido & Luz A. Flórez & Didier Hermida & Karen L. Pulido‐Mahecha & Francisco Lasso‐Valderrama, 2022. "Effects of the COVID‐19 pandemic on the Colombian labour market: Disentangling the effect of sector‐specific mobility restrictions," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(S1), pages 308-357, February.
    2. Louis-Philippe Beland & Oluwatobi Fakorede & Derek Mikola, 2020. "Short-Term Effect of COVID-19 on Self-Employed Workers in Canada," Canadian Public Policy, University of Toronto Press, vol. 46(S1), pages 66-81, July.
    3. Pierre Brochu & Jonathan Créchet, 2021. "Survey Non-response in Covid-19 Times: The Case of the Labour Force Survey," Working Papers 2109E, University of Ottawa, Department of Economics.
    4. Giannina Vaccaro & Tania Paredes, 2022. "COVID-19 and Gender Differences in the Labor Market: Evidence from the Peruvian Economy," Documentos de Trabajo / Working Papers 2022-515, Departamento de Economía - Pontificia Universidad Católica del Perú.
    5. Giovanni Gallipoli & Christos A. Makridis, 2022. "Sectoral digital intensity and GDP growth after a large employment shock: A simple extrapolation exercise," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(S1), pages 446-479, February.
    6. Brochu, Pierre & Créchet, Jonathan & Deng, Zechuan, 2020. "Labour market flows and worker trajectories in Canada during COVID-19," CLEF Working Paper Series 32, Canadian Labour Economics Forum (CLEF), University of Waterloo.

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