Giving Compass' Take:

· Futurity discusses new research showing the impact of coronavirus on the job market, with only 3 jobs being created for every 10 layoffs that occur.

· How have these layoffs impacted the economy?  What can be done to improve the job market and increase job security during this time?

· Check out this article about supporting job quality during the pandemic.

The numbers are finally capturing the full magnitude of the economic downturn the coronavirus pandemic has caused. The US Bureau of Labor Statistics, for example, recently announced a 14.7% unemployment rate for April.

The working paper is part of a special project by the Becker Friedman Institute of Economics that highlights new economic information about COVID-19.

While this reallocation shock is good news for some sectors, the authors find the news particularly troubling for others.

“We estimate that 42% of recent pandemic-induced layoffs will result in permanent job loss,” says Steven J. Davis of the University of Chicago Booth School of Business, a leading expert on hiring practices, job loss, and the effects of economic uncertainty.

“If the economic shutdown lingers for many months, or if serious pandemics become a recurring phenomenon, there will be profound, long-term consequences for the reallocation of jobs, workers, and capital across firms and locations.”

The researchers constructed a novel, forward-looking measure of expected job reallocation across US firms—pairing anecdotal evidence from news reports and other sources, along with the rich dataset provided by the Survey of Business Uncertainty.

Developed and fielded by the Federal Reserve Bank of Atlanta in cooperation with Chicago Booth and Stanford University, the SBU is a monthly panel survey which allows the calculation of a firm’s expected growth rate over the next year, and its degree of uncertainty about its expectations.

Read the full article about the effect of coronavirus on the job market at Futurity.