How a VCU economist’s project provided essential data early in the pandemic
In the spring of 2020, as everything was coming to a grinding halt because of COVID-19, U.S. policymakers were developing responses to the pandemic before they had the data to know how much it would affect the economy.
“In some sense, policymakers were flying blind” in the early days of the shutdown with regards to labor market data, said Adam Blandin, Ph.D., an assistant professor in the Virginia Commonwealth University School of Business.
U.S. labor market statistics are collected once a month and published with a three-week delay. In normal times, those statistics are timely enough to be useful. Given the stunning speed of the COVID-19 outbreak and the corresponding economic downturn, policymakers and researchers were left in the dark. Indeed, while the outbreak had shut down a substantial portion of the U.S. economy by mid-March 2020, new statistics would not be available until May 8.
Blandin and his frequent collaborator, Alexander Bick, Ph.D., an associate professor of economics at Arizona State University, felt they could use their skills as economists to help.
They started the Real-Time Population Survey to help policymakers, reporters, analysts and the public during the pandemic. The survey mirrors the Labor Department’s Current Population Survey, but with a much faster turnaround.
“We thought this was going to have huge economic effects, especially the idea of shutting down large numbers of workplaces to try to social distance,” Blandin said. “Ultimately it just came from a feeling of wanting to be involved in this big event that was happening. … It just seemed crazy that we would have to wait two months to figure out how many people lost their jobs, or how many people lost income, or how many families lost income.”
Initially, the economists conducted their survey twice a month and released the results two weeks later.
“From the conception of this project to when we put our first numbers out, it was something like just a few weeks,” Blandin said. “And [our] first numbers came out in early April, which was [still] over a month before the government numbers would come out.”
Faster data, additional questions
In addition to the faster turnaround, another benefit of running their own survey was that Blandin and Bick could include additional questions. For example, they asked how many people had changed employers since the start of the pandemic.
“The government asks whether you’re working or not, but it doesn’t track very carefully whether you’re working for the same employer as before,” Blandin said. “One really striking number that comes out of our survey is somewhere between a quarter and a third of workers changed employers during the pandemic, which is roughly twice as many workers as typically change employers during a year.
“That’s really important to know. For example, whether someone is working for a new employer could tell you how workers are changing across different kinds of jobs.”
The research provides helpful insight into what the labor market of the future will look like, said Leslie S. Stratton, Ph.D., chair and professor in the VCU Department of Economics.
For instance, another supplemental question Blandin and Bick added in their survey regarded working from home.
“The advent of the pandemic shifted many white-collar jobs from a physical office space to a virtual one,” Stratton said. “Homes morphed into workplaces. Homeowners often found it necessary to adapt their living spaces to accommodate not only one or two working adults, but also learning spaces for children studying remotely. Some households moved to larger quarters, some took advantage of remote work to move their residences to more remote locations. Dr. Blandin’s goal is to assess whether the virtual workplace is here to stay, whether employees will split their time between home and office workspaces, and whether those who physically relocated their homes are able to keep their jobs moving forward.”
The Real-Time Population Survey research directly affected government policy as well. Steven J. Davis, Ph.D., adviser to the U.S. Congressional Budget Office, cited Blandin and Bick’s work when testifying before the U.S. House of Representatives Committee on Financial Services, saying that “COVID-19 shock has caused huge shifts in consumer spending patterns, working arrangements and business practices. Many of these shifts will endure after the pandemic ends, with profound implications for labor markets.”
The testimony was important in the context of deciding what additional support the U.S. economy needed.
This past summer, policymakers and researchers debated how quickly the labor force would rebound. As the number of vaccinations rose, the number of COVID-19 cases dropped. It seemed as if clear skies were ahead.
But Robert S. Kaplan, then-president of the Federal Reserve Bank of Dallas — which provided funding for the Real-Time Population Survey — cautioned that the comeback in the labor force might be weaker than people were anticipating. “It may be wise to consider a wider range of indicators, in addition to headline employment data releases, in order to assess the state of the current labor market,” Kaplan wrote, citing Blandin and Bick’s research.
“His prediction,” Blandin said, “has been a little bit vindicated in that employment has come back very slowly in the last several months relative to where people thought it was going to come back in the spring of 2021.”
The biggest takeaway from this research is that the pandemic created the largest disruption to the U.S. economy, and especially the U.S. labor market, since the Great Depression. The second is that, while the short-run effects were historically large, it is also likely that this shock is going to have sizable long-run effects, Blandin said.
“Just as one example, a third of people have changed their employers and they do not appear to be going back to their old employers,” he said. “And many of those would not likely have changed if the pandemic hadn’t occurred.
“So that change in employers in the long run, and the increase in work from home, are two examples that the pandemic will likely have a big effect going forward.”