Study: Pandemic restrictions have no long term effect on jobs

It goes without saying that pandemic restrictions reduce employment. When the state banned indoor dining in November, many restaurants closed and the unemployment rate spiked.

But new research shows that those lost jobs come back almost as soon as restrictions are removed, indicating that the pandemic may cause no long term effects on the job market.

Written by Brad Hershbein of the W.E. Upjohn Institute for Employment Research and Harry Holzer of Georgetown University, the research paper compares the economic effects of COVID restrictions to the economic effects of the virus itself – in terms of deaths and lost wages.

“Deaths from the virus produce a lasting drag on employment,” reads a summary of the working paper. “Even if a state’s high COVID-19 mortality rate plummeted suddenly and permanently, the employment rate might not recover for months.”

The paper suggests that restrictions have been beneficial in that they reduce the effects of the virus. Once lifted, jobs quickly return.

However, the effect isn’t distributed evenly across the board. Jobs return more slowly or not at all for Black and Hispanic people.

“We … confirm that Blacks and Hispanics not only had larger initial employment losses in the spring, but that their employment recoveries lagged over the summer and early fall,” reads the paper.

The duo wrote that the disparate policies of various states provided a perfect environment for them to gauge how different strategies affected economic conditions. That allowed them to make policy recommendations for states going forward.

They recommend more financial relief for workers suffering during the pandemic. They also suggest the federal government should invest in infrastructure projects and workforce development programs to spur employment as the pandemic subsides.

You can read a summary here.