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The Impact of Covid-19 on Productivity

Author

Listed:
  • Nicholas Bloom
  • Philip Bunn
  • Paul Mizen
  • Pawel Smietanka
  • Gregory Thwaites

Abstract

We analyse the impact of Covid-19 on productivity using data from an innovative monthly firm survey panel that asks for quantitative impacts of Covid on inputs and outputs. We find total factor productivity (TFP) fell by up to 5% during 2020-21. The overall impact combined large reductions in ‘within-firm’ productivity, with an offsetting positive ‘between-firm’ effects as less productive sectors, and less productive firms within them, contracted. Despite these large pandemic effects, firms’ post-Covid forecasts imply surprisingly little lasting impact on aggregate TFP. We also see significant heterogeneity over firms and sectors, with the greatest impacts in those requiring extensive in-person activity. We also ask about unmeasured inflation in the form of deteriorating product quality, finding an additional 1.4% negative impact on TFP.

Suggested Citation

  • Nicholas Bloom & Philip Bunn & Paul Mizen & Pawel Smietanka & Gregory Thwaites, 2020. "The Impact of Covid-19 on Productivity," NBER Working Papers 28233, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28233
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    References listed on IDEAS

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    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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