The impact of Covid-19 on productivity

Nicholas Bloom, Philip Bunn, Paul Mizen, Pawel Smietanka and Gregory Thwaites

No 2020/13, Discussion Papers from University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM)

Abstract: We analyze the impact of Covid-19 on productivity in the United Kingdom using data derived from a large monthly firm panel survey. Our estimates suggest that Covid-19 will reduce TFP in the private sector by up to 5% in 2020 Q4, falling back to a 1% reduction in the medium term. Firms anticipate a large reduction in ‘within-firm’ productivity, primarily because measures to contain Covid-19 are expected to increase intermediate costs. The negative ‘within-firm’ effect is partially offset by a positive ‘between-firm’ effect as low productivity sectors, and the least productive firms among them, are disproportionately affected by Covid-19 and consequently make a smaller contribution to the economy. In the longer run, productivity growth is likely to be reduced by diminished R&D expenditure and diverted senior management time spent on dealing with the pandemic.

Keywords: covid-19; pandemic; productivity (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-eff, nep-hrm and nep-ino
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Citations: View citations in EconPapers (45)

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https://www.nottingham.ac.uk/cfcm/documents/papers/2020/cfcm-2020-13.pdf (application/pdf)

Related works:
Working Paper: The impact of Covid-19 on productivity (2023)
Working Paper: The impact of Covid-19 on productivity (2023)
Working Paper: The impact of Covid-19 on productivity (2022)
Working Paper: The impact of COVID-19 on productivity (2022)
Working Paper: The Impact of Covid-19 on Productivity (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notcfc:2020/13

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