CIVID-Induced Economic Uncertainty, Tasks, and Occupational Demand

In this paper, we provide novel evidence of the impact of COVID-induced economic uncertainty on the relative demand for different occupations in the US, according to a wide range of occupational characteristics. We conduct the analysis using monthly online job postings data at the occupation-US state level in January 2020 -- December 2020 together with data on fixed occupational characteristics and monthly measures of economic uncertainty in the US, which are apportioned to occupation-state pairs based on pre-COVID country-wide occupational employment shares. The analysis reveals that COVID-induced economic uncertainty increased the relative demand for occupations with relatively high non-routine cognitive analytical, non-routine cognitive interactive, and non-routine manual task content -- especially when these are also non-essential, as well as occupations that have both relatively high non-routine cognitive analytical and social or interaction task content. This evidence is consistent with the secular phenomenon of routine-biased technological change resulting in job polarisation and the growing complementarity between analytical and social tasks, but also with its episodic aspect implying its acceleration during recessions. Additional evidence, however, shows that COVID-induced economic uncertainty decreased the relative demand for customer-oriented occupations (e.g. food service, personal care and service) and increased the relative demand for essential or contact-intensive occupations with relatively high routine manual or routine cognitive task content, as well as occupations that are both contact-intensive and essential or service-oriented (e.g. healthcare practice and support, protective service, community and social service). This evidence is rationalised by idiosyncratic features of the pandemic shock (e.g. major health crisis, social distancing, lockdown). Further research in this direction could help us to understand whether these effects are temporary or long-lasting.