Future of work

Using a difference-in-difference model, the authors estimate the causal effect of COVID-19 lockdowns on the labour market. They do so by looking at countries that implemented a severe lockdown and countries, such as Korea, that did not. Their estimates imply that a one per thousand increase in infections caused a 2–3% drop in local employment in the absence of a lockdown. In countries such as the US and UK, where large-scale lockdowns were implemented, this drop ranges between 5–6%. This suggests that COVID-19 itself, rather than the lockdown, is responsible for a considerable portion of job losses. Lifting lockdowns around the world, therefore, may lead to only modest job recovery unless infection rates fall.