Job flows and reallocation during the recovery

Exploiting very rich administrative data covering the period from January 2018 until December 2021, this study analyses the individual employment trajectories of a large sample of Italian workers during the pandemic and the subsequent recovery, comparing them with those of similar individuals in previous years. To understand the heterogeneous impact of the crisis on the workforce, we split the sample into three groups based on workers’ labour market status in the first four months of 2020: (i) those continuously employed, (ii) those who lost their job, and (iii) those not employed (either new entrants or individuals with previous work experience). While workers in the first group were more likely to keep their job during the pandemic than they would have been in the past, those in the other groups faced scarce employment prospects. The probability of finding a job decreased sharply for labour market entrants, amplifying pre-existing differences. Finally, we did not find evidence of significant cross-firm or cross-sector reallocation.