The impact of Covid-19 on productivity

Bloom, Nicholas, Bunn, Philip, Mizen, Paul, Smietanka, Pawel and Thwaites, Gregory Douglas (2023) The impact of Covid-19 on productivity. CEP Discussion Papers (CEPDP1929). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

We analyse the impact of Covid-19 on productivity using data from an innovative monthly firm survey panel that asks for quantitative impacts of Covid on inputs and outputs. We find total factor productivity (TFP) fell by up to 5% during 2020-21. The overall impact combined large reductions in 'within-firm' productivity, with an offsetting positive 'between-firm' effects as less productive sectors, and less productive firms within them, contracted. Despite these large pandemic effects, firms' post-Covid forecasts imply surprisingly little lasting impact on aggregate TFP. We also see significant heterogeneity over firms and sectors, with the greatest impacts in those requiring extensive in-person activity. We also ask about unmeasured inflation in the form of deteriorating product quality, finding an additional 1.4% negative impact on TFP.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2023 The Author(s)
Divisions:	Economics
Subjects:	H Social Sciences > HC Economic History and Conditions R Medicine > RA Public aspects of medicine H Social Sciences > HD Industries. Land use. Labor
JEL classification:	D - Microeconomics > D2 - Production and Organizations > D24 - Production; Cost; Capital and Total Factor Productivity; Capacity D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D84 - Expectations; Speculations E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E24 - Macroeconomics: Employment; Unemployment; Wages; Intergenerational Income Distribution (includes wage indexation) E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output (Income) Convergence
Date Deposited:	24 Jan 2024 17:27
Last Modified:	24 Jan 2024 17:30
URI:	http://eprints.lse.ac.uk/id/eprint/121314

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