Hit Harder, Recover Slower? Unequal Employment Effects of the COVID-19 Shock

Abstract

The destructive economic impact of the COVID-19 pandemic was distributed unequally across the population. A worker’s gender, race and ethnicity, age, education, industry, and occupation all mattered. We analyze the initial negative effect and its lingering effect through the recovery phase, across demographic and socioeconomic groups. The initial negative impact on employment was larger for women, minorities, the less educated, and the young whether or not we account for the industries and occupations they worked in. By February 2021, however, the differential effects across groups had gotten much smaller overall and had entirely vanished once the different industries and occupations they work in are taken into account. In particular, the differential effects between men and women vanished with or without the industry and occupation compositions taken into account, indicating that women’s progress in the labor market over the past decades has not been wiped out by the pandemic. Across race and ethnicity, Hispanics and Asians were the worse hit but made up most of the lost ground, while the initial impact on Blacks was smaller but their recovery was slower. (JEL J21, J15, J16)