Worker flows and reallocation during the recovery

Exploiting very rich administrative data covering the period from January 2018 until December 2021, this study analyses the individual employment trajectories of a large random sample of Italian workers during the pandemic and the subsequent recovery, comparing them with similar individuals in previous years. To understand the heterogeneous impact of the crisis on the workforce, we split the sample based on workers’ labour market status in the first four months of 2020: (i) those continuously employed, (ii) those who lost their job, and (iii) those not employed (either new entrants or with previous work experience). While workers in the first group were more likely to keep their job during the pandemic than in the past, the others faced scarce employment prospects for a prolonged period. The probability to find a job decreased sharply for labour market entrants, amplifying pre-existing differences. Finally, we do not find evidence of significant cross-firm or cross-sectoral reallocation.