The e61 Institute was pleased to host many international academics during the past month. Giovanni L. Violante, Princeton University, presented at the e61 Lounge Session “The curious post-pandemic labor market in the US”.
The research by Gianluca Violante and his co-authors on the US labour market indicates that the strong recovery from the COVID-19 recession has been very unusual compared to previous recessions.
Job vacancies posted by American firms have been unusually high compared to the number of Americans searching for jobs.
Gianluca’s research suggests this puzzle is explained by:
1) a demand boom caused by the very large fiscal stimulus and
2) a decline in the capacity of the labour market to match job vacancies and job seekers.
We have seen similar unusual patterns in the Australian labour market.
e61 research has suggested that the large gap between job vacancies and job seekers is due to border closures which means that foreign workers can’t fill the vacant jobs like they normally would in an economic recovery.