LabRec - Labor Demand in Crisis and Recovery

This project aims at studying changes in labor demand during the corona crisis and beyond, comparing the developments in labor demand for different occupations in 2020 with the same weeks in 2018 and 2019. We also have a particular focus on vacancies in occupations that are important for young workers. Four weeks into the pandemic we saw was a decline of 40 percent in new job-postings. The steep decline was followed by a slow and incomplete catch up the during the remaining months of 2020. By the end of 2020, the number of new job-postings was 8-10 percent lower than for the same period before the pandemic. The impact was even stronger for young people below 26 years of age. In April 2020 job postings were 63 percent lower than in the previous years. All in all, young workers saw a more volatile job market than other groups. The next part of the project considers the tightness of the labor market measured by the ratio between the number of vacancies and the number of people who are not in work but are looking for work. The situation during the pandemic differs from previous experiences in that the number of people on furlough skyrocketed. Since official unemployed reports also include furloughed workers, who have lower search activity than the unemployed without a job, we get a distorted picture of the tightness of the labor market. Unlike what has been the case in the past, this correction plays a big role. Corrected figures show that the labor market was already very tight when the society reopened in autumn 2021. Denmark, Norway, and Sweden had very different policy responses to the pandemic. While Norway had very strict lock-down policies, Sweden had one of the world's least intrusive responses, mainly based on recommendations. Denmark was in between, but closer to Norway in its policy approach. In the third part of the project, we compare the development in labor demand between the Scandinavian countries. All countries experienced significant declines, particularly in the first months of the pandemic. Preliminary results show a stronger drop in demand during periods of closure in Denmark and Norway, compared with figures from the same period in Sweden. At the same time, demand picked up more quickly when society was reopened, while Sweden experienced a longer period of lower demand. All the countries were back with stronger and still rising labor demand two years after the pandemic started. Even if there are differences in the observed patterns between Sweden and the to other countries, it is clear that the outbreak and subsequent recommendations affected economic behaviour also in Sweden, which is also supported by changes in observed mobility patterns between the countries. We investigate how the COVID-19 pandemic impacted gender differences in employment and how this crisis differs from other crises. First, we analyze to which extent the Norwegian authorities’ handling of the pandemic was gender mainstreamed. Second, we study the consequences of the pandemic for gender equality in the Norwegian labor market, through an empirical comparison of the COVID-19 crisis and the global financial crisis in 2007–2009 and the oil price crisis in 2014–2016. Our empirical analyses show that the employment drop in the first phase of the COVID-19 crisis was similar for men and women, but women’s employment levels dropped more this time than in recent recessions. On the demand side, the asymmetric employment reductions in crises tend to be related to the gender-segregated labor market, and our empirical results show that full-time work among women relative to men increased and that mother’s full-time work relative to women without children increased, suggesting supply side adjustments as well. The Covid-19 pandemic created major disruptions in the world economy in the midst of a period of major technological transformations. The latest study examines how these disruptions changed the introduction of new technology across firms. To what extent did the crisis accelerate or postpone ongoing investments in digitization and automation, and how did this affect the distribution of productivity between companies. Finally, we examine the effects on the demand for high- and low-skilled workers. The pandemic massively disrupted the investment plans of Norwegian companies. Almost half of the enterprises experienced postponement of investment plans. Almost equally common, however, was to be stimulated to introduce new technology during the pandemic. Most innovations involved the introduction of new digital tools, even beyond the obvious use of communication platforms such as Zoom and Teams, but robots and automation were also introduced due to the pandemic. The introduction of new technology led to an increased demand for labor for all skill groups except for unskilled workers. It is the skilled and highly qualified workers who benefit from these innovations in the form of increased hourly wage.

Prosjektet har gitt kunnskap om utviklingen i etterspørselen etter arbeidskraft under pandemien. Vi har fulgt endringene i utlysninger av nye jobber gjennom ulike politikk vinduer gjennom pandemien. Dette gir viktig grunnlag for å vurdere kostnader og gevinster ved ulike politikk-responser. Vi har også dokumentert hvordan pandemien og den medfølgende nedstengningen påvirket jobber for unge kraftig. Disse tallene vil være nyttige for å kunne beregne og tolke også langsiktige effekter av pandemien og den medfølgende politikk responsen for «generasjon Covid». Vi har også evaluert knapphetsindikatorer for arbeidsmarkedet i perioder med omfattende permitteringer. I slike perioder er det viktig å skille mellom ledige som er permittert, og ledige som ikke er permittert, fordi de som er permittert ikke er aktive søkere i arbeidsmarkedet. Vi viste dermed allerede relativt tidlig i pandemien at arbeidsmarkedet beveget seg i retning av knapphet på arbeidskraft. Dette forholdet har antakelig hatt betydning for både arbeidsmarkedspolitikken og den makroøkonomiske tilnærmingen i denne perioden. Knappheten på arbeidskraft forsterket seg etter pandemien og ble etter hvert tydelig i alle land. Kvinners sysselsetting ble mer påvirket under Covid enn i tidligere nedgangstider. På etterspørselssiden er dette typisk relatert til det kjønnsdelte arbeidsmarkedet. Samtidig ser vi at heltidsarbeid blant kvinner gikk opp, antakelig en tilbudsside respons. Politikken knyttet til håndteringen av COVID hadde i liten grad et kjønnsperspektiv. Danmark, Norge og Sverige hadde forskjellig politikk under pandemien. Mens Norge hadde en av verdens strengeste nedstengninger, hadde Sverige en av verdens minst inngripende. Danmark lå imellom, men liknet mer på Norge. Vi har sammenliknet utviklingen i utlyste nye jobber mellom landene. Alle landene opplevde betydelig fall i arbeidskrafts etterspørselen, særlig de første månedene av pandemien.Foreløpige resultater viser sterkere fall i etterspørselen i perioder med nedstengning i Danmark og Norge, sammenliknet med tall fra samme periode i Sverige. Samtidig tok etterspørselen seg raskere opp igjen når samfunnet ble gjenåpnet, mens Sverige opplevde en lengre periode med lavere etterspørsel. Alle landene var tilbake med sterkere og fortsatt stigende arbeidskrafts-etterspørsel to år etter at pandemien startet. Disse resultatene, sammen med data om mobilitet, smitte og dødelighet, gir viktig input for å forstå effektene av ulike tilnærminger. Bedriftene endret atferd under pandemien, også når det gjelder innovasjoner og bruk av ny teknologi. Selv om mange bedrifter utsatte investeringsplanene sine, ser det klar ut il at den teknologiske utviklingen fikk en dytt under pandemien, særlig digitalisering. Bedriftene ser for seg økt etterspørsel etter alle kompetansegrupper, med unntak av ufaglærte, som følge av dette.

The project consists of three work packages: In the first work package, we start out by tracking changes in job vacancy postings, hires, separations and job growth following the outbreak of COVID 19. We compare the trajectories from 2020, to pre-crisis observations from the same months from 2018 and 2019, by occupations, industries, and regions. These analyses will be in “real-time” drawing monthly data at half- or yearly intervals from the fall of 2020. We follow both online job vacancy postings, hires, separations and job growth. The focus in the initial phase will be to study the development of occupations, industries, and regions that are most likely to be affected by the political measures and behavioral responses by individuals and firms, with characteristics such as direct human contact, travel and transport dependency, conditions for home- and teleworking etc. In the next phase it will be important to identify spillover effects to other industries and occupations, and the responses to new challenges in the aftermath of the pandemic, such as likely drops in domestic and international demands, broken international value chains, a decline in oil prices, a possible financial crisis, that again are likely to change the trajectories of labor demand. In the second work package, we add data on labor productivity of firms, and analyse how the crisis impacts productivity growth, job reallocation, inequality, and polarization in the labor market. We depart from underlying trends in productivity and changes in relative demand for different types of labor, and study the extent to which these trends are magnified or ameliorated during the different phases of the downturn. The third work package is comparative. We use nearly real-time data on job postings in Norway, Sweden, Denmark and the US, coupled with nearly real-time data on new hires, new separations and net job growth, we will map labor demand from January 2020, into the crisis and onward.