On the heterogeneous impacts of the COVID-19 lockdown on US unemployment
Abstract
We develop a matching model that predicts the impact of the COVID-19 lockdown on US unemployment, while accounting for the contrasted impacts across various job types. The model is calibrated on the subprime experience and is then used to identify the job-specific lockdown shocks, using observed worker flows by diploma. The model persistence-which is significantly larger than in the Diamond-Mortensen-Pissarides model-is dampened by CARES act that facilitates the use of temporary separations. Counterfactual experiments show that time-varying risk, hiring cost externalities, and wage rigidity are needed to account for these crises.
Domains
Economics and Finance| Origin | Files produced by the author(s) |
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