Discussion paper

DP14825 The first weeks of the coronavirus crisis: Who got hit, when and why? Evidence from Norway

Using real-time register data we document the magnitude, dynamics and
socio-economic characteristics of the crisis-induced temporary and
permanent layoffs in Norway. We find evidence that the effects of social
distancing measures quickly spread to industries that were not directly
affected by policy. Close to 90\% of layoffs are temporary, although
this classification may change as the crisis progresses. Still, there is
suggestive evidence of immediate stress on a subset of firms that
manifests itself in permanent rather than temporary layoffs. We find
that the shock had a strong socio-economic gradient, hit a financially
vulnerable population, and parents with younger children, and was driven
by layoffs in smaller, less productive, and financially weaker firms.
Consequently though, the rise in unemployment likely overstates the loss of
output associated with the layoffs by about a third.

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Citation

Alstadsæter, A, B Bratsberg, G Eielsen, W Kopczuk, S Markussen, O Raaum and K Røed (2020), ‘DP14825 The first weeks of the coronavirus crisis: Who got hit, when and why? Evidence from Norway‘, CEPR Discussion Paper No. 14825. CEPR Press, Paris & London. https://cepr.org/publications/dp14825