The 2019-2020 coronavirus outbreak has prompted a sharp economic downturn in the U.S. and around the world. Designing and implementing an effective policy response to the crisis is now a major priority for policymakers and researchers. Our work aims to provide data on labor market conditions every other week, with results published the same week, thereby reducing the current information lag.
Our major findings for the last week of March (March 29 through April 4) are as follows:
Dramatic reductions in employment. We find an employment rate of 60.7 percent during the first week of April, compared with 72.7 percent in the second week of March, implying 24 million fewer workers. We also find an unemployment rate of 20.2 percent during the first week of April, compared with 4.5 percent in the second week of March. One positive note is that more than half of the unemployed reported being temporarily laid off, suggesting that many could return to work quickly if conditions improve.
Even larger declines in aggregate labor supply than implied by employment alone. Hours worked per working age adult declined 25 percent from March; in the first week of April, individuals worked 20.4 hours on average, compared with 27.5 weekly hours in the second week of March. Hours worked per employed declined 12 percent from March; even those who are still employed are working 4.5 fewer hours per week, a reduction of over half a day of work. This implies that just under half of the decline in hours per working age adult were due to reductions in hours worked per employed, and are therefore not reflected in changes to the employment rate.
Unprecedented increase of the share of hours worked from home. We find that 63.8 percent of work hours were from home during the first week of April, compared with roughly 10 percent in the Spring of 2017 and 2018.
Lower earnings even for individuals still working the same job as in February. We find that 21.9 percent of workers still working the same job as in February experienced a reduction in their earnings last week compared to February; about half of these reported that their reduction in earnings was 50 percent or larger. At the same time, 11 percent of workers with the same job as in February report higher weekly earnings last week compared with February.
Disparities in labor market outcomes by sex, age, education, race, and hourly status. Although negative effects are widespread, they are more pronounced among workers who are female, older and less educated.
Our Labor Market Survey [this IS a subhead. Paragraph should start immediately below. Do a shift-return.]
Effective policies require timely and accurate data on the scale of the downturn, yet traditional data sources are only made available at a significant lag. For example, the March 2020 Employment Situation report by the Bureau of Labor Statistics only reflected labor market outcomes from the week ending Friday March 13, which precedes most major developments related to the outbreak: In the week ending on March 13, weekly initial claims of unemployment insurance were 281,000, compared with 3.3 million the following week.
The April 2020 Employment Situation report will reflect labor market outcomes from the third week of April, but is not scheduled for release until May 8. The gap between the data needs of policymakers and the time lag of traditional data sources has left policymakers “flying blind” to a significant degree.
The goal of this project is to help fill that void. To do so, we will collect online survey data every other week from a sample representative of the U.S. working age population (age 18–64). The major reference period for the first wave of the survey is the week of March 29–April 4, though we also ask questions about work experience prior to March 2020. The survey questions closely follow the structure of the Basic Labor Market module in the Consumer Population Survey (CPS), which allows us to compute labor market estimates consistent with their measures. We also include a suite of questions specifically tailored to the present economic situation which are not asked by the CPS.
The data collected this week is for a sample representative of the U.S. working age population (age 18–64) about their labor market situation last week (March 29–April 4) following the approach used in official U.S. statistics.
The coronavirus outbreak has shut down a substantial portion of the U.S. economy. US labor market statistics are collected once a month and published with a three-week delay. Currently, the most recent statistics refer to the week of March 8-14, and new statistics will not be available until Friday, May 8. But Arizona State University Associate Professor of Economics Alexander Bick now has more timely and frequent data available on the outbreak’s impact on the labor force; Bick’s work aims to provide data on labor market conditions every other week and he plans to publish results the same week, thereby reducing the current information lag.
The data collected this week is for a sample representative of the U.S. working age population (age 18–64) about their labor market situation last week (March 29–April 4) following the approach used in official U.S. statistics.
Alexander Bick is an associate professor in the Department of Economics at the W. P. Carey School of Business, Arizona State University. Adam Blandin is an assistant professor of economics at Virginia Commonwealth University.
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