Cross-Country Analysis of Labor Markets during the COVID-19 Pandemic

This paper studies employment outcomes during the early stages of the COVID-19 pandemic across eight countries exhibiting different case levels and policy responses: the United States, Australia, France, Denmark, Italy, South Korea, Spain, and Sweden. While the proportion of people not-at-work increased in all countries, safety net policies seem to influence whether people remained employed-but-absent from work as opposed to becoming unemployed or leaving the labor force. We find large employment decreases among young workers and those who only have a high school degree, and increased labor market disparities in countries with the largest declines in employment. A variety of evidence suggests labor demand was a larger driver of employment declines than labor supply and that stringent social distancing policies reduce employment even in the absence of high case numbers. Job characteristics - the importance of face-to-face interactions and the ability to work remotely - were closely related to changes in labor market outcomes.