How have lost market hours from the partial economic shutdown affected Americans?
With the partial shutdown implemented in the middle of March 2020 because of the coronavirus disease 2019 (COVID-19) pandemic, many Americans have found their time being allocated differently—whether they transition to working remotely or work fewer hours (because of job loss or reduced hours). In “(Federal Reserve Bank of St. Louis Review, Working Paper 2020-025B, August 2020), Oksana Leukhina and Zhixiu Yu analyze the effects of total market hours lost because of the COVID-19 pandemic on time allocation of leisure and home production between February and April 2020. The effects of job loss or an increase in remote work affect each household differently. Since the shutdown limited the time spent at work (because of remote work or job loss), individuals can spend more time on home production or leisure. By identifying the changes in time use caused by the COVID-19 pandemic, the authors use these estimates to evaluate the cost of having a shutdown.”
Using data from the American Time Use Survey (ATUS), Leukhina and Yu break down how many total market hours, on average, are lost and how the extra hours of home production and leisure are spent. ATUS classifies individuals’ use of time into 17 categories. Of these 17, this study focuses on 7 categories of primary time use: market work, other income-generating activities, job search, childcare, nonmarket work, leisure, and other time use. The authors use market work and leisure categories and combine childcare and nonmarket work to formulate the home-production category that they address, in particular.
Between February and April, average market weekly hours were reduced by 6.25 hours—households with less education and with children were affected the most. Approximately 90 percent of lost work hours have been reallocated to leisure or home-production activities. Lost market hours that go into home-production activities range from 11 percent to 49 percent, with single women without a college degree and without children at the lowest percentage.
In turn, overall, home-production hours increased more for households with children and married individuals. Weekly home-production hours increased by 2.1 between February and April after the additional effects of remote work were added. To evaluate the cost of the shutdown, the authors calculate the value of home production as an average wage earned by workers of that industry (e.g., cooks, cleaners, or childcare workers). The value of monthly home production increased by $25.09 billion. In contrast, monthly gross domestic product, or GDP, decreased $292.61 billion during this period.
While home-production hours have increased because of the need for childcare and other nonmarket work, leisure hours have also increased because 35 percent of commuting workers have switched to telecommuting. Although the shutdown has decreased the options for leisure activities, the authors find that leisure hours consist mostly of sleeping, watching TV, socializing, and exercising. Married men with less education, nonworking spouses, and children lost the most market work hours (10.6 hours) and had the largest change between work and leisure (65.4 percent).
The overall effect of hours of work lost from the pandemic depends on the type of household experiencing it. The authors found that married men with children, stay-at-home wives, and less education (nearly 11 hours lost) and single households with children and with no college degree were most affected. Meanwhile, college-educated men with no children and with working spouses were least affected by the changes caused by the partial shutdown.