Data behind job losses reveals demographic disparities during pandemic

Studies show job losses hit Hispanics, women and younger workers the hardest -- and reveal effects of temporary federal paid sick leave on responses to stay-at-home orders

As U.S. unemployment has soared to 14.7 percent and job losses escalate in almost every industry due to the ongoing COVID-19 pandemic, Indiana University researchers are working to understand exactly who is losing jobs in what occupational areas and why.

"There are lots of discussions happening without data behind them," said Kosali Simon, the Herman B Wells professor in the O'Neill School of Public and Environmental Affairs at IU Bloomington and one of the researchers involved. "We know there is massive job loss, but we also know there is a lot more to that story. There are still lots of unanswered questions on how the epidemic is affecting different types of workers and families in the United States."

Simon and various co-authors recently released three papers examining the impact of the coronavirus pandemic on jobs, labor markets and unemployment.

One paper examines the demographic diversity in labor market impacts. Findings from that study indicate that job losses in March 2020 were greater for Hispanics; younger workers, ages 20 to 24; women; workers with large families of four or more children; and less-educated workers.

In fact, the co-authors note, "in the first month of COVID-19, workers aged 20 to 24 and parents of at least four children already experienced a more substantial decrease in employment than they did during the entire duration of the previous two recessions."

Declines in jobs for young workers and Hispanics likely occurred because these groups disproportionately work in industries hard-hit by social distancing and stay-at-home measures, such as food service. School closures and reduced access to child care are believed to be responsible for employment disruptions in households with children.

Not surprisingly, there was also a larger decline in employment for occupations relying on face-to-face tasks, while people able to work remotely were less likely to become unemployed.

As unemployment persists for so many, Simon and her co-authors say that understanding how job loss is costing particular groups more than others can guide policy-makers in providing extra protection for those groups during this unprecedented time.

In an additional two papers, Simon and co-authors looked at the effect of the new federal paid sick leave policy implemented April 1 and the impact of mitigation policies such as school closures on labor markets.

The temporary national paid sick leave policy provided many employees with up to two weeks of paid leave. Using cell phone location data, the researchers determined that the policy did enable more people to stay home, with full-time work (as suggested by location of cellular devices) declining by 17.7 percent and staying home increasing by 7.5 percent.

Regarding the effects of mitigation policies such as school closures on job markets, the researchers found that in March 2020, the economic disruption was a nationwide shock, with particular state policies having little effect on unemployment and job losses.

Going forward, the researchers plan to continue incorporating fresh data into their analyses of job loss and unemployment.

"With new data from April, we expect to develop better, more fine-grained interpretations of unemployment, and what losses can be attributed to what factors," Simon said.

"Determinants of Disparities in COVID-19 Job Losses" was co-authored by Laura Montenovo and Felipe Lozano Rojas, doctoral students in the O'Neill School of Public and Environmental Affairs, as well as Coady Wing, an associate professor in the O'Neill School, along with Xuan Jiang and Bruce Weinberg, Ohio State University, and Ian Schmutte, University of Georgia.

"Effect of a Federal Paid Sick Leave Mandate on Working and Staying at Home: Evidence from Cellular Device Data" was co-authored by Martin Anderson, University of North Carolina at Greensboro; Johanna Catherine Maclean, Temple University; Michael Pesko, Georgia State University; and Simon.

"Is the Cure Worse than the Problem Itself? Immediate Labor Market Effects of COVID-19 Case Rates and School Closures in the U.S." was co-authored by Lozano Rojas, Jiang, Montenovo, Simon, Weinberg and Wing.

The papers were published as working papers by the National Bureau of Economic Research.

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