Lena Anayi, Jose Maria Barrero, Nicholas Bloom, Philip Bunn, Steven Davis, Julia Leather, Brent Meyer, Myrto Oikonomou, Emil Mihaylov, Paul Mizen, Gregory Thwaites, 13 August 2021

The Covid-19 pandemic hit some firms and sectors especially hard. As economies bounce back, a key question is whether the recovery will re-employ all of the workers shed during the downturn, and whether they will go back to similar jobs. Using data from the Decision Maker Panel survey of UK businesses and the Survey of Business Uncertainty in the US, this column examines the ongoing impact of the Covid shock on cross-firm resource reallocation, summing the pandemic’s effects thus far and firms’ expectations for future reallocation of jobs and sales. The combined backward and forward-looking rate of job reallocation has roughly doubled in both countries, and sales reallocation has risen by even more, particularly in the UK. Businesses expect this accelerated pace of reallocation to persist into 2022, which raises the chance that mismatch unemployment will slow recovery in the medium term. 


CEPR Policy Research