Abstract

The Covid-19 shock has reallocated resources through the economy. Contact-intensive service areas such as gastronomy, hotels, air traffic, events, culture and leisure lost employment. Others, on the other hand, created jobs, such as delivery services, supermarkets, test and vaccination centres, IT or public services.Still, there was no big quit in Germany. The separation rates rose only briefly at the beginning of the pandemic, but afterwards there were even fewer finished jobs than before the crisis. The reallocation came about because some industries hired significantly less than others. Insofar, Covid triggered a hiring crisis. Indeed, while separation rates quickly normalised, the weakness of job finding rates was persistent.Thus, while Covid did not primarily displace workers directly from employment, it reshuffled job chances through sectors and occupations. In doing so, it broke through the path dependency of employment histories. This project contribute to the literature by analysing the labour market consequences on an individual worker level. Thus, we ask for the effect of the reshuffle on mismatch and wage premia. While similar projects usually define treated groups as those affected by layoffs, we focus on new jobs. In detail, for constructing a treatment intensity, we estimate the pre-crisis probabilities of taking up specific jobs and combine them with [vacancies, new hires] representing the affectedness of sectors/occupations.On the one hand, the Covid shock might have destroyed optimal individual options and led to sullying effects. On the other hand, it might have created opportunities not present before and caused cleansing effects.