New Delhi (NVI): Two out of every five jobs lost during the coronavirus outbreak will not come back. In addition to this, the pandemic will have a profound, long-term consequence for the reallocation of jobs, workers, and capital across firms and locations, according to research by University of Chicago.
According to Bureau of Labor Statistics, the US had 14.7 per cent unemployment rate for the month of April.
“We estimate that 42 per cent of recent pandemic-induced layoffs will result in permanent job loss,” said Steven J. Davis of the University of Chicago Booth, School of Business, a leading expert on hiring practices, job loss and the effects of economic uncertainty.
“If the economic shutdown lingers for many months or if serious pandemics become a recurring phenomenon, there will be profound, long-term consequences for the reallocation of jobs, workers, and capital across firms and locations,” Davis added.
The researchers constructed a novel, forward-looking measure of expected job reallocation across the US firms, pairing anecdotal evidence from news reports and other sources, along with the rich dataset provided by the Survey of Business Uncertainty (SBU).
Fielded by the Federal Reserve Bank of Atlanta in cooperation with Chicago Booth and Stanford University, a monthly panel survey was also developed which allows the calculation of a firm’s expected growth rate over the next year and its degree of uncertainty about its expectations.
In addition, two special staffing-related questions in the SBU reveal that pandemic-related developments caused near-term layoffs equal to 12.8 per cent of March 1 employment and new hires equal to 3.8 per cent or roughly three new hires per 10 layoffs.
The authors mention numerous sources that report large-scale hiring by certain retailers, grocers and food-delivery firms.
Furthermore, they find that some companies are becoming creative in managing their labor needs.
“Some companies are forming partnerships that exploit the re-allocative nature of the COVID-19 shock to speed hiring,” said Davis.
He also said that, “Grocery chains are creating labor exchanges with hotels and retail stores are pairing with gig companies, among other creative solutions to move workers to where they are needed.”
Similarly, researchers from the Instituto Tecnológico Autónomo de México and Stanford also contributed to the work.
