"The Impact of COVID-19 on Small Business Employment and Hours: Real-Time Estimates With Homebase Data"
A webinar by Etienne Lalé, Department of Economics, Université du Québec à Montréal
June 16th, 2020 at 1pm
Meeting ID: 944 8907 4143
Summary: We use worker-firm matched daily data from Homebase, a scheduling and time clock software provider, to construct new real-time estimates of the impact of the COVID-19 pandemic on employment and hours worked of small businesses in service-providing industries. We find four key results: (1) employment of small businesses in the service sectors hit hardest by the pandemic contracted by an estimated 23 million since mid-February – a staggering 60% decline; (2) almost half of this decline is due to business closures; (3) about one third of closed businesses have reopened, but their employment remains far below pre-crisis levels; (4) average weekly hours declined sharply in the second half of March but have since largely recovered, although less so for temporarily furloughed employees. The results suggest that the official establishment estimates from the BLS employment report substantially underestimate the extent of the contraction because these estimates do not directly take into account the effects of small business closures. The results also indicate first green shoots that point to the importance of small businesses reopening as a key factor for the recovery.