Study Concludes Reversing COVID-19 Stay at Home Orders Won’t Turn Around Labor Demand

A team of economists examining Burning Glass Technologies job posting data and unemployment insurance claims concluded that the timing of stay-at-home orders didn’t affect the drop in the job market—and that lifting those orders may not turn that around. 

In their paper published by the National Bureau of Economic Research, economists Lisa B. Kahn, Fabian Lange, and David Wiczer combined the study of unemployment insurance claims across the country with an in-depth analysis of Burning Glass’s real-time database of internet job postings. 

The study looked at data from mid-March to mid-April 2020. In a span of five weeks beginning in mid-March, 26 million people filed unemployment claims and online job postings declined by 30 percent.  By comparison, during the Great Recession, it took 18 months for job postings to decline by 50 percent. 

Declines in employment and job postings occurred across every state and region at essentially the same time. Differences in local or state stay-at-home policies regarding COVID-19 and the number of cases of the virus have not had apparent effect on unemployment or future jobs postings. Initial research from Burning Glass suggests that states whose economies are based on the most affected industries such as hospitality and tourism showed the largest declines. 

Being able to work from home appears to reduce unemployment risk, only a few states make unemployment claims available by occupation. Washington state is one, and the study found unemployment claims from work-from-home occupations in the state grew at half the rate of claims in occupations that were not work-from-home. State of Washington data also showed fewer claims among work-from-home employees. These findings suggest that those who work from home may be slightly insulated from the negative effects of stay-at-home orders.   

In the study period, the researchers found that occupations that can be performed from home dropped even more than those that can’t in national job postings.  This was true in both essential and non-essential industries. More recent Burning Glass data, however, shows an increase in job postings specifically labeled as work-from-home roles, suggesting that the economy may be adapting to remote work.   

Since there is no evidence that differences in the nature of stay-at-home state or local policies affected the overall job market, there is also little reason to expect future changes to those policies to reverse these economic conditions, the authors concluded.   

While the authors don’t say so, that conclusion implies that retraining, reskilling, and redeployment are going to play a critical role as the U.S. climbs out of this unprecedented downturn. 

You can find a summary of the core findings at Econofact or download the full article.  For more on the job market and the pandemic, visit the Burning Glass COVID-19 page.