ABSTRACT
US workers receive unemployment benefits if they lose their job, but not for reduced working hours. In alignment with the benefits incentives, we find that the labor market responded to COVID-19 and related closure-policies mostly on the extensive (12 pp outright job loss) margin. Exploiting timing variation in state closure-policies, difference-in-differences (DiD) estimates show, between March 12 and April 12, 2020, employment rate fell by 1.7 pp for every 10 extra days of state stay-at-home orders (SAH), with little effect on hours worked/earnings among those employed. Forty percentage of the unemployment was due to a nationwide shock, rest due to social-distancing policies, particularly among "non-essential” workers. © 2022 The Authors. Contemporary Economic Policy published by Wiley Periodicals LLC on behalf of Western Economic Association International.
ABSTRACT
This paper examines the determinants of social distancing during the shutdown phase of the COVID-19 epidemic. We classify state and local government actions, and we study multiple proxies for social distancing based on data from smart devices. Mobility fell substantially in all states, even ones that did not adopt major distancing mandates. Most of the fall in mobility occurred prior to the most stringent sanctions against movement, such as stay-at-home laws. However, we find evidence suggesting that state and local policies did have an independent effect on mobility even after the large initial reductions occurred. Event studies show that early and information-focused actions such as first case announcements, emergency declarations, and school closures reduced mobility by 1–5 percent after five days. Between March 1 and April 14, average time spent at home grew from 9.1 hours to 13.9 hours. We find, for example, that without state emergency declarations, hours at home would have been 11.3 hours in April, suggesting that 55 percent of the growth is associated with policy and 45 percent is associated with (non-policy) trends. State and local government actions induced changes in mobility on top of a large and private response across all states to the prevailing knowledge of public health risks. © 2021 American Society of Health Economists.