Labor Dynamics and Actual Telework Use during Covid-19: Skills, Occupations and Industries

We document the dynamics of labor-changes in employment and hours worked-and of actual telework use during the pandemic. We find that employment losses are unrelated to telework use starting in 2020-Q4. This is in stark contrast with the onset of the pandemic that disproportionately affected skills, occupations and industries with low telework use. Our findings are the results of two phenomena. First, labor is dynamically heterogeneous: employment of skill and occupation groups that are most affected by the initial Covid-19 shock recover quickly, catching up with the rest of the economy by October 2020. Second, the use of telework has homogeneously declined within skills, occupations and industries-by 40 percent on average-leaving the relative ranking of telework use across groups unaltered. Finally, there is substantial and persistent cross-industry heterogeneity in labor market outcomes one year into the pandemic that is unrelated to the use of telework.