Pause, Pivot, and Shift: Situational Human Capital and Responses to Sudden Job Loss

Abstract

How, in the wake of the coronavirus crisis, do workers respond to rapid changes in the labor market? This paper mobilizes existing literature on occupational mobility and job loss to develop a theory of situational human capital in which some workers are better positioned to weather occupational transitions than others depending on the alignment between their skill sets, opportunities, and particular contexts. Previous literature looks at this in the case of “pausing,” when workers, such as women, take time off from work. Relatively less explored but equally consequential are transitions like “pivoting,” in which workers maneuver within their occupations to adjust their practices or platforms in order to keep working, and “shifting,” in which workers change their occupations altogether. Since most government unemployment benefits focus almost exclusively on workers’ pauses, they neglect to support workers as they pivot and shift during periods of labor market instability and disruption. This paper concludes by offering some policy recommendations to fill this gap.