U.S. Labor Market

Each of you (individually) will analyze a case study and prepare a two-part 7-page report on a practical labor economics problem. The first part should be a 2-page memo in which you need to, in a succinct way, convey the nature of the problem, your solutions, and their consequences. The second part should be a more detailed technical report (5 pages) backing the conclusions in your memo. The goal is to put you in the shoes of an expert and you can think of me as a decision-maker who will follow your recommendation.  Case study for this year is “The consequences of COVID-19 for the U.S. labor market” COVID-19 global pandemic has a significant impact on the labor markets in the U.S. and globally. It tested the efficiency and robustness of labor market institutions and generated a myriad of policies at both local and national level aimed to remediate its consequences for current and future workers. Furthermore, firms also responded with both altered demand as well as working arrangements for their workers. Many economists and policymakers have made analyses and predictions about the consequences of the epidemic for the labor market and jobs, and in particular for different types of occupations. Building on all this, your goal in this case study is three-fold: (1) Describe the state of the U.S. labor market pre-pandemic. Focus on labor demand and supply as well as types of jobs, immigration, and employment conditions. Provide information on core labor market institutions in the U.S. e.g., unemployment insurance, disability benefits, leave regulations. Please use statistical facts and scientific evidence to back your description. (10 points) (2) Describe how the COVID-19 pandemic affected the U.S. labor market between its start in February 2020 and the current situation in August 2020. What happened to U.S. employment and unemployment? Were the consequences heterogeneous across sectors, types of jobs, educational groups, gender, race/ethnicity, etc.? How about spatial variation? What about experienced workers vs. new graduates? Please use statistical facts and scientific evidence to back your description. (10 points) (3) Propose a new policy or modification to an existing policy that would ameliorate the impact of COVID-19 on the U.S. labor market. Please make sure that the policy is feasible to implement in terms of both resources and politics. Pay particular attention to issues of scalability, compliance, potential externalities, and cost-benefit analysis. Justify your choice and thought process using data and/or economic models. (10 points) Note: guidelines in points (1) to (3) above are intentionally vague. I want you to own the project and research topics that are particularly exciting to you. In that, you do not need to cover all the example questions above and you should add more information specific to the focus of your technical report. I do require, however, that you include all three sections in your work i.e., you need to talk about the description of the labor market pre- and during the pandemic as well as about your proposed policy. This content should be included in both memo and report. The memo is a policy-focused, succinct summary of your report. Please contact me if you have any questions about either part of the project.

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