The pandemic decimated the labor market at record speed
High-frequency data are critical when it comes to tracking the rapid economic destruction and disruption wrought by the COVID-19 pandemic,” written by IMF economist Wenjie Chen in the latest issue of Finance & Development. “This information has also helped confirm, nearly in real-time, the unequal impact of the crisis on particular populations, especially women.”
Weekly and sometimes daily snapshots of human behavior—restaurant reservations, pedestrian traffic, mobile phone data, airport checkpoint volume, retail activity, and even nighttime images of Earth from space—are now closely scrutinized. Embedded within these high-frequency data are clues that may paint a picture of the impact of the crisis on the outlook for women, young people, and minorities and possibly foretell changes for years to come. The use of real-time data for decision-making was growing rapidly even before the pandemic, mostly because of progress in digitalization and the emergence of big data. The COVID-19 pandemic, however, has brought its usefulness into sharp relief.
Chen’s new study uses real-time data supplied by Indeed, one of the major providers of worldwide employment-related search engines for job listings. This gives us one-of-a-kind insight into the behavior of virtually all employers that post online job advertisements. The main advantage of Indeed’s online job posting data is that the information is close to real-time data and offers complete coverage of online job postings, whereas government survey data are limited to the employers surveyed.
This real-time view of labor demand provides analytical backing for something that has become increasingly evident as the year has progressed: demand for jobs for women has fallen disproportionately more than for men, and low-skilled workers are likely to fall further behind.
A real-time view of labor demand
As workplaces shut down, the trend in newly posted job vacancies (online posts seven days old or less) plunged by about 50 percent on average across the sample countries beginning in April, compared with the same period in 2019 Since then, job vacancies have shown a gradual recovery, but online job posting trends are still significantly down overall compared with previous years despite the reopening of many sectors within the sample countries.
Job postings and policy support
The real-time data also offer evidence that more economic support from the government correlates with a smaller decline in online job postings during the initial rounds of lockdown measures. Countries reacted with strong discretionary fiscal and monetary measures to counteract the negative repercussions of the pandemic. Economic support included fiscal stimulus spendings such as income support for those without jobs, business relief—some explicitly mandating the preservation of employee relationships—and debt relief for households. This pattern also holds when controlling for countries’ GDP per capita, the number of infections and deaths from COVID-19, and the share of the population that is elderly. In countries with more fiscal stimulus, including grants and loans to businesses, it is likely that such stimulus is contributing to slower declines in job vacancies.
Going forward
Our findings show the value of real-time data during a rapidly unfolding crisis. Such data have been useful in confirming the pandemic’s effect on widening disparities among women and men, rich and poor. But how can real-time data be harnessed to inform policies going forward? If anything, it gives us a glimpse of what may come in the future and how to target support in the present.
Unsurprisingly, the biggest hits were in sectors that were mostly or completely shut down, such as hospitality, restaurants, tourism, and personal services. As a result of this falloff, these sectors’ shares of overall job postings were down substantially. Conversely, job postings in health care, social services, and education have been rising as shares of total postings. The question is whether these trends will continue. The answer will depend on the evolution of the pandemic and the path of economic recovery.
These policies are not only crucial to lifting constraints on women’s economic empowerment, but they are also necessary to promote an inclusive post–COVID-19 recovery.
