Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/269110 
Year of Publication: 
2022
Series/Report no.: 
ECB Working Paper No. 2703
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
Recent research has argued that the COVID-19 shock has also brought about a reallocation shock. We examine the evidence for such an occurrence in the United States, taking a broad perspective. We first consider micro data from CPS and JOLTS; there is no noticeable uptick in occupation or sector switches, nor churn, either at the aggregate level or the cross-section, or when broken down by firms' s ize. We then examine whether mismatch unemployment has risen as a result of the pandemic; using an off-the-shelf multisector search and matching model, there is little evidence for an important role for mismatch in driving the elevated unemployment rate. Finally, we employ a novel Bayesian SVAR framework with sign restrictions to identify a reallocation shock; we find that it has played a relatively minor role in explaining labor market patterns in the pandemic, at least relative to its importance in earlier episodes.
Subjects: 
Reallocation
COVID-19
mismatch
JEL: 
E24
J63
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-5288-0
Document Type: 
Working Paper

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