Effects of stay-at-home orders on skill requirements in vacancy postings

Abstract

The COVID-19 pandemic and containment policies have had profound economic impacts on the labor market. Stay-at-home orders (SAHOs) implemented across most of the United States changed the way of people worked. In this paper, we quantify the effect of SAHO durations on skill demands to study how firms adjust labor demand within occupation. We use skill requirement information from the 2018 to 2021 online job vacancy posting data from Burning Glass Technologies, exploit the spatial variations in the SAHO duration, and use instrumental variables to correct for the endogeneity in the policy duration related to local social and economic factors. We find that policy durations have persistent impacts on the labor demand after restrictions are lifted. Longer SAHOs motivate management style transformation from people-oriented to operation-oriented by requiring more of operational and administrative skills and less of personality and people management skills to carry out standard workflows. SAHOs also change the focus of interpersonal skill demands from specific customer services to general communication such as social and writing skills. SAHOs more thoroughly affect occupations with partial work-from-home capacity. The evidence suggests SAHOs change management structure and communication in firms.