THE COVID LABOR MARKET & THE GREAT RESIGNATION

Abstract

The COVID-19 pandemic has impacted nearly every aspect of the US economy. This paper looks specifically at the impacts that the pandemic has had on the labor market. First, a summary is provided of the major developments in the labor market with the onset of the pandemic. This includes measures such as the unemployment rate, labor force participation rate, and indicators of job turnover. It details the spike in unemployment, drop in labor force participation, and an on-going trend of increased voluntary job departures (a trend coined “The Great Resignation”). A literature review is then conducted to gather additional details on these trends. The literature describes differences in employment losses by gender and ethnicity with women, African Americans, and Hispanics all facing larger losses in employment. In addition, the literature empirically verifies the Great Resignation trend. Finally, three empirical models are created to see how different macroeconomic trends affect quits and separately how different demographic factors influence labor force nonparticipation.