In a typical recession in the US economy, most job losses are permanent. Only a small percentage are considered temporary, where a worker can reasonably expect to be called back.

But Kahn, a professor of economics at the University of Rochester, says the COVID-19 recession is anything but typical.

Temporary unemployment reached a high of around 80% during the COVID-19 recession. That peak, from last May, declined as expected—until progress stalled in controlling the spread of the virus.

Rebutting assertions that lockdowns have put a drag on the economy, Kahn says, “The shutdowns are not what have been driving the economic collapse; it’s the global pandemic.”

Here, Kahn explains the COVID-19 recession and what the world could look like in the future:

Q: What’s different about the COVID-19 recession?

A: In April, 20 to 30 million people were separated from their jobs and roughly 80% of them were placed on temporary layoff. What typically happens in a recession is that people permanently lose their jobs. In this case, people expected the shock to be temporary—maybe two weeks or a month. Over the rest of the year, we think that group was steadily recalled back to their previous employers, and that has been a very good thing. Unfortunately, we have seen much less progress among the group who was permanently separated from their previous employers. 

Q: What’s the relationship between state lockdowns and the collapse of the economy?

A: The shutdowns are not what have been driving the economic collapse; it’s the global pandemic. In New York State, the movie theaters started opening, but I don’t think many people have been going to the movies. People decide for themselves whether they want to leave their homes to consume during such a risky time.

Read the full article about post-COVID economic recovery by Peter Iglinski-Rochester at Futurity.