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  • P-ISSN 2586-2995
  • E-ISSN 2586-4130

KDI Journal of Economic Policy. Vol. 43, No. 2, May 2021, pp. 23-51

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Who’s Hit Hardest? The Persistence of the Employment Shock by the COVID-19 Crisis†


Author & Article History

Manuscript received 09 April 2021; revision received 14 April 2021; accepted 04 May 2021.


The persistence of the employment shock by COVID-19 has various policy implications during the pandemic and beyond it. After evaluating the impact of the health crisis at the individual level, this study decomposes employment losses into persistent and transitory components using the observed timing of the three major outbreaks and subsequent lulls. The estimation results show that while face-to-face services were undoubtedly hit hard by the COVID-19 crisis, the sectoral shock was less persistent for temporary jobs and self-employment. Permanent jobs in the hard-hit sector showed increasingly large persistent losses through the recurring crises, indicating gradual changes in employer responses. The persistent job losses were concentrated on young and older workers in career transitions, whose losses are likely to have long-term effects. These results suggest that targeted measures to mitigate the persistent effects of the employment shock should take priority during the recovery process.


COVID-19, Employment Shock, Job Losses, Persistence, Heterogeneity

JEL Code

E24, J21, J63

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