Generosity of income support programs
The first possible explanation is that income support programs during the pandemic allowed workers to be picky, slowing job applications, acceptances and, ultimately, the employment recovery.
However, preliminary evidence reviewed in our paper, including from the recent phasing out of the US federal unemployment insurance supplement, suggests the early removal of COVID-related unemployment benefits had only a modest and temporary effect on getting people back to work.
Mismatch
A second candidate explanation is an increase in the mismatch between the industries and occupations....We find that the employment loss due to mismatch during the crisis has been modest
The She-cession
A third explanation seems more potent....We estimate that the excess employment contraction for mothers of children younger than 5 years old compared with other women accounted for around 16 percent of the total US employment gap with respect to pre-COVID levels as of October 2021. That was down from 23 percent in early September
Withdrawal of older workers
The final and potentially largest contributor to a lag in employment recovery is an exodus of older workers from the labor force....As of September, the rise in inactivity among workers age 55 and up accounted for around 35 percent of the outstanding employment gap
Taken together, mismatch, the She-cession and older workers’ withdrawal from the labor force may account for roughly 70 percent of the US employment gap
The first possible explanation is that income support programs during the pandemic allowed workers to be picky, slowing job applications, acceptances and, ultimately, the employment recovery.
However, preliminary evidence reviewed in our paper, including from the recent phasing out of the US federal unemployment insurance supplement, suggests the early removal of COVID-related unemployment benefits had only a modest and temporary effect on getting people back to work.
Mismatch
A second candidate explanation is an increase in the mismatch between the industries and occupations....We find that the employment loss due to mismatch during the crisis has been modest
The She-cession
A third explanation seems more potent....We estimate that the excess employment contraction for mothers of children younger than 5 years old compared with other women accounted for around 16 percent of the total US employment gap with respect to pre-COVID levels as of October 2021. That was down from 23 percent in early September
Withdrawal of older workers
The final and potentially largest contributor to a lag in employment recovery is an exodus of older workers from the labor force....As of September, the rise in inactivity among workers age 55 and up accounted for around 35 percent of the outstanding employment gap
Taken together, mismatch, the She-cession and older workers’ withdrawal from the labor force may account for roughly 70 percent of the US employment gap
