Covid-19 health risk, ability to work from home and establishment size

Abstract

ABSTRACT In December 2021, with COVID-19 cases about to reach their peak, US employment still remained below its pre-pandemic level, with data indicating a strong labour demand and a weak labour supply. Many US individuals did not work, out of a concern about Covid-19. At the same time, the pandemic affected businesses of different sizes differently. At first, the pandemic hit especially hard small businesses. But later in 2020 the recovery was stronger at smaller businesses than at larger ones. These developments call for a renewed attention to how the labour supply varies across employers of different sizes. I focus on two important determinants of labour supply during a pandemic: the vulnerability to the severe effects of the virus because of pre-existing health conditions and the ability to work from home. I study how these two factors vary across establishments of different sizes. I find that the ability to work from home is higher at larger establishments, for both workers with and without COVID-19 health risk. However, the difference in ability to work from home across these two types of workers does not decrease at larger employers.