A dose-response assessment of the labour demand during the Covid-19 pandemic in Italy

This paper analyses how different levels of exposure to Covid-19 affected the local labour demand in Italy during the pandemic. Due to the spatially heterogeneous incidence of Covid19, we suggest that the provinces economic structures mediated the effects on the demand for different types of jobs. We use a continuous treatment framework in which, in the absence of a control group, we measure the effects of different levels of exposure to Covid-19 via the rate of contagion on the local labour demand. For this purpose, we make use of the Lightcast dataset for Italy which encompasses daily data from job postings at a NUTS 3 level. Overall, we find a non-linear, but general decrease in the growth rate of labour demand. However, we identify a threshold around the 90th level of exposure to Covid-19 beyond which the growth rate of the local labour demand increases. Our data suggest that this increase is mostly driven by essential job vacancies. Furthermore, our analysis reveals a peculiar geographical divide, whereby labour demand in provinces in Southern Italy were disproportionally affected despite the population not being as exposed to Covid-19 as the North of the country. This research aims to elucidate possible mechanisms that provoked swifts in the local labour demand and at identifying which provinces were the most affected and in the need of policy intervention