Modeling decreased labor access after the COVID-19 pandemic: economic, social, and demographic implications

This study examines the effect of decreased labor access resulting from fewer employees being available for in-person work, based on the unique industry makeup of the region in which work is located. Our analysis is based on simulations in which each industry is assigned an Effective Potential – a score which ranks how well workers in a particular industry can perform tasks remotely on a scale of 0 to 100 (with 0 being nothing can be done remotely, while 100 implies all tasks can be performed remotely). The Effective Potential is then used to derive the Labor Access Index policy variable, which estimates the effect of access to labor choice and individual characteristics by occupation and industry on labor productivity. Since it has the greatest ability for workers to perform functions remotely, the finance and insurance industry experiences the smallest decrease in labor access at 24%. The accommodation and food services industry, on the other hand, witnesses the largest decrease at 92%. The implications of the results for policy are discussed, in the context of creating a more equitable labor market that unlocks the potential of more segments of society – especially historically marginalized demographics.