Working Paper Revision
Measuring Sectoral Supply and Demand Shocks during COVID-19
Abstract: We measure labor demand and supply shocks at the sector level around the COVID-19 outbreak by estimating a Bayesian structural vector autoregression on monthly statistics of hours worked and real wages. Our estimates suggest that two-thirds of the 16.24 percentage point drop in the growth rate of hours worked in April 2020 are attributable to supply. Most sectors were subject to historically large negative labor supply and demand shocks in March and April, but there is substantial heterogeneity in the size of shocks across sectors. We show that our estimates of supply shocks are correlated with sectoral measures of telework.
Keywords: Sign Restrictions; Supply and Demand Shocks; COVID-19; Structural Vector Autoregressions;
JEL Classification: E24; E30; J20;
https://doi.org/10.20955/wp.2020.011
Status: Published in European Economic Review
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Bibliographic Information
Provider: Federal Reserve Bank of St. Louis
Part of Series: Working Papers
Publication Date: 2020-05
Number: 2020-011
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- Working Paper Revision: Measuring Sectoral Supply and Demand Shocks during COVID-19
- Working Paper Revision: Measuring Sectoral Supply and Demand Shocks during COVID-19
- Working Paper Revision: Measuring Sectoral Supply and Demand Shocks during COVID-19