Covid-19, Stay-at-Home Orders and Employment: Evidence from CPS Data

112 Pages Posted: 23 May 2020

See all articles by Louis-Philippe Béland

Louis-Philippe Béland

Carleton University

Abel Brodeur

University of Ottawa - Department of Economics; IZA Institute of Labor Economics

Taylor Wright

University of Ottawa

Abstract

In this paper, we examine the short-term consequences of COVID-19 and evaluate the impacts of stay-at-home orders on employment and wages in the United States. Guided by a pre-analysis plan, we document that COVID-19 increased the unemployment rate, decreased hours of work and labor force participation, especially for younger workers, non-white, not married and less-educated workers. We built four indexes (exposure to disease, proximity to coworkers, work remotely and critical workers) to study the impact of COVID-19. We find that workers that can work remotely are significantly less likely to have their labor market outcomes affected, while workers working in proximity to coworkers are more affected.The unemployment effects are significantly larger for states that implemented stay-at-home orders. Our estimates suggest that, as of early May, these policies increased unemployment by nearly 4 percentage points, but reduced COVID-19 cases by 186,600– 311,000, and deaths by 17,851–23,325. We apply our estimates to compute lost income ($18.6–$21.4 billion), reduced government income tax revenues ($3.4–$5.5 billion), increased unemployment insurance benefit payments ($5–$5.8 billion) and reduced hospital costs ($0.7–$1.2 billion). Despite the jobs lost, age adjusted value of statistical life suggests that stay-at-home orders are cost effective.

Keywords: COVID-19, unemployment, wages, remote work, exposure to disease, essential workers, stay-at-home orders, lockdown

JEL Classification: I15, I18, J21

Suggested Citation

Béland, Louis-Philippe and Brodeur, Abel and Wright, Taylor, Covid-19, Stay-at-Home Orders and Employment: Evidence from CPS Data. IZA Discussion Paper No. 13282, Available at SSRN: https://ssrn.com/abstract=3608531

Louis-Philippe Béland (Contact Author)

Carleton University

1125 colonel By Drive
Ottawa, K1S 5B6
Canada

Abel Brodeur

University of Ottawa - Department of Economics ( email )

200 Wilbrod Street
Ottawa, Ontario K1N 6N5
Canada

HOME PAGE: http://https://sites.google.com/site/abelbrodeur/

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Taylor Wright

University of Ottawa

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