Labor Markets in Crisis: The Double Liability of Low-Wage Work During COVID-19.

Abstract

We adopt a novel identification strategy to examine the heterogeneous effects of Canada’s COVID‐19 economic shutdown on hours worked across the earnings distribution. Early labor‐market analyses found that workers in the bottom of the earnings distribution experienced a much larger reduction in hours worked than workers in the top of the earnings distribution. Our analysis reveals a double liability of low‐wage work during Canada’s COVID‐19 economic shutdown: while workers in every quintile experienced a large reduction in hours on average, significant increases in hours were only present among workers in the bottom quintile. Implications for crisis income supports are discussed.