Discussion Paper

The Effects of the Coronavirus on Hours of Work in Small Businesses

Published: June 2020

Author(s): Joseph Altonji, Zara Contractor, Lucas Finamor, Ryan Haygood, Ilse Lindenlaub, Costas Meghir, Cormac O'Dea & Dana Scott

Researchers study the impact of COVID-19 on hours worked at different types of small businesses across the U.S.

Using firm-level timesheet data from Homebase, researchers concentrate on businesses operating in the U.S. in the last two weeks of January 2020 and how their hours changed in the following months. They find that all hours dropped dramatically in March, particularly in NY, NJ, and CT (three states among the hardest hit by the first wave of COVID-19). Most of this change was from a reduction in firms and employees themselves, rather than individual employees working fewer hours.

Abstract and Citation

Abstract

The onset of the Covid-19 pandemic has led to a dramatic reduction in employment and hours worked in the US economy. The decline can be measured using conventional data sources such as the Current Population Survey and in the number of individuals filing for unemployment. However, given the unprecedented pace of the ongoing changes to labor market conditions, detailed, up-to-date, high frequency data on wages, employment, and hours of work is needed. Such data can provide insights into how firms and workers have been affected by the pandemic so far, and how those effects differ by type of firm and worker wage level. It can also be used to detail – in real time – the state of the labor market.

Publication Link

https://tobin.yale.edu/sites/default/files/covid-19%20response/Tobin%20Center%20Report%20on%20Employment%20and%20Hours%20in%20Small%20Businesses%20Report%20final.pdf

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