We integrate multiple datasets to examine how COVID-19 intervention policies impact the hospitality labor market.
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We find that business closure policies are associated with a 20–30% reduction of non-salaried workers in the hospitality industry with the biggest impact on leisure from March-April of 2020.
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Business reopening policies play a statistically significant role in slowly reviving the labor market.
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The rise of new cases on a daily basis is associated with the continued deterioration of the labor market.
Abstract
Using new high-frequency data that covers a representative sample of small businesses in the United States, this study investigates the effects of the COVID-19 pandemic and the resulting state policies on the hospitality industry. First, business closure policies are associated with a 20–30% reduction of non-salaried workers in the food/drink and leisure/entertainment sectors during March-April of 2020. Second, business reopening policies play a statistically significant role in slowly reviving the labor market. Third, considerable differences exist in the impact of policies on the labor market by state. Fourth, the rise of new COVID-19 cases on a daily basis is associated with the continued deterioration of the labor market. Lastly, managerial, practical, and economic implications are described.