Abstract
The COVID-19 pandemic resulted in the most abrupt changes in U.S. labor force participation and unemployment since the Second World War, with different consequences for men and women. This paper models the U.S. labor market to help to interpret the pandemic’s effects. After replicating and extending Emerson’s (2011) model of the labor market, we formulate a joint model of male and female unemployment and labor force participation rates for 1980–2019 and use it to forecast into the pandemic to understand the pandemic’s labor market consequences. Gender-specific differences were particularly large at the pandemic’s outset; lower labor force participation persists.
Highlights
unemployment rates (URs) only respond to the male UR, whereas the female UR responds to the labor force participation rates (LFPRs) gap, as well as to both the male and female URs
To help us facilitate our interpretation of the joint analysis, we start with bivariate analyses, looking at the relationship between male and female labor force participation rates and the relationship between male and female unemployment rates
UR only respond to the male UR in the long-run, but not to the LFPR gap or the female
Summary
The COVID-19 pandemic resulted in the largest change in U.S labor force participation and unemployment since the Second World War. [and] because of fear of COVID to a significant extent” This highlights the importance of examining gender-specific unemployment and labor force participation rates. While labor market dynamics were stable in past decades, they appear to have changed in the pandemic-induced recession, which has been called a “she-cession”, in which job losses and burdens initially fell disproportionally on women; see Bluedorn et al (2021). To examine these and other issues, this paper formulates a joint model of male and female labor force participation and unemployment rates in the United States.
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