{
  "title": "Why Jobs are Plentiful While Workers are Scarce",
  "publication": "IMF Blog, January 19, 2022",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2022/01/19/why-jobs-are-plentiful-while-workers-are-scarce",
  "canonical": "https://www.imf.org/en/blogs/articles/2022/01/19/why-jobs-are-plentiful-while-workers-are-scarce",
  "overlayPath": "/en/blogs/articles/2022/01/19/why-jobs-are-plentiful-while-workers-are-scarce/index.md",
  "summary": "In the United States and the United Kingdom, job openings remain plentiful while workers have not fully returned to the labor market; the employment rate is below its pre-COVID level in both countries.",
  "sections": [
    {
      "heading": "Overview and context",
      "content": "- In the United States and the United Kingdom, job openings remain plentiful while workers have not fully returned to the labor market; the employment rate is below its pre-COVID level in both countries.\n- High vacancy-to-unemployment ratios and elevated job quits coexist with an incomplete employment recovery.\n- The Omicron wave may have a cooling effect on labor markets, potentially extending the trend.\n- The broader trend has important implications for growth, inequality, and inflation: a sluggish employment recovery amid sustained labor demand could constrain economic growth while fueling wage increases and further inflation."
    },
    {
      "heading": "Four explanations evaluated (IMF staff research using granular US and UK data)",
      "content": "- Generosity of income support programs\n  - Hypothesis: COVID-related income support allowed workers to be picky, slowing applications, acceptances, and employment recovery.\n  - Evidence: Preliminary findings, including from phasing out of the US federal unemployment insurance supplement, suggest the early removal of COVID-related unemployment benefits had only a modest and temporary effect on getting people back to work.\n- Mismatch between available jobs and jobseekers\n  - Observation: Jobs requiring in-person interactions (restaurants, hotels, entertainment) were hit hardest; “teleworkable” jobs fared better; delivery services boomed.\n  - Quantitative finding: As of early last fall, mismatch explains about 18 percent of the outstanding employment gap versus pre-COVID levels in the US and 11 percent in the UK.\n  - Note: The employment loss due to mismatch during the crisis has been modest and smaller than during the Global Financial Crisis.\n- The “She-cession” (US-specific)\n  - Mechanism: Prolonged school closures and scarcity of childcare pushed many mothers of young children out of the labor force.\n  - Quantitative finding: Excess employment contraction for mothers of children younger than 5 years old accounted for around 16 percent of the total US employment gap with respect to pre-COVID levels as of October 2021; that was down from 23 percent in early September, partly due to return to in-person schooling later that month.\n  - Contrast: There was no She-cession in the UK; employment fell less for females than for males, potentially because nurseries in the UK remained open throughout the pandemic.\n- Withdrawal of older workers\n  - Mechanism: Older workers (age 55 and up) exiting the labor force—possibly due to health concerns or re-evaluation of need to work as housing and financial asset prices grew—reduces labor supply.\n  - Quantitative finding: As of September, the rise in inactivity among workers age 55 and up accounted for around 35 percent of the outstanding employment gap versus pre-pandemic levels in both economies.\n  - Uncertainty: It is unclear how many of those who retired or quit may eventually return to the labor force."
    },
    {
      "heading": "Aggregate contributions to the employment gap",
      "content": "- United States (approximate attribution as of research period):\n  - Mismatch, She-cession, and older workers’ withdrawal together may account for roughly 70 percent of the US employment gap compared with pre-COVID levels.\n  - Residual role remains for other factors such as elevated unemployment benefits and other pandemic-related income support.\n- United Kingdom (approximate attribution as of research period):\n  - About 10 percent of the employment gap can be attributed to mismatch and 35 percent to older workers’ withdrawal from the labor force.\n  - No She-cession detected."
    },
    {
      "heading": "Sectoral and skill patterns, and potential preference shifts",
      "content": "- Vacancies are highest among low-skill occupations while employment in these jobs remains below pre-2020 levels.\n- The rise in voluntary quits—the “great resignation”—is greatest for low-skilled jobs, suggesting a possible change in worker preferences triggered by the pandemic.\n- Outflow of foreign workers after Brexit, accelerated by the pandemic, reduced the number of potential jobseekers available to fill open vacancies."
    },
    {
      "heading": "Implications and policy recommendations",
      "content": "- To minimize risk of persistent scarring to employment:\n  - Address the pandemic itself so workers are fully able to return to the labor market.\n  - Implement well-designed training programs to reduce risks of mismatch.\n  - Expand childcare and preschool opportunities—particularly in the US—to help mothers of young children return to work.\n- Monitor whether older workers’ exits are permanent; large permanent retirements would imply longer-lasting labor supply effects with implications for growth and inflation.\n\nCarlo Pizzinelli, Ippei Shibata, January 19, 2022\n\n---\n\n\n References\n\n- New IMF staff research\n- https://www.imf.org/wp-content/uploads/2022/01/Labor-Blog-chart-1.jpg\n- https://www.imf.org/wp-content/uploads/2022/01/Labor-blog-chart-2.jpg\n\nSource: https://www.imf.org/en/blogs/articles/2022/01/19/why-jobs-are-plentiful-while-workers-are-scarce"
    }
  ],
  "bullets": [
    "[Markdown version](/en/blogs/articles/2022/01/19/why-jobs-are-plentiful-while-workers-are-scarce/index.md)",
    "[Structured JSON version](/en/blogs/articles/2022/01/19/why-jobs-are-plentiful-while-workers-are-scarce/index.json)",
    "[Bundle manifest](/en/blogs/articles/2022/01/19/why-jobs-are-plentiful-while-workers-are-scarce/bundle-manifest.json)",
    "Authors: Carlo Pizzinelli, Ippei Shibata",
    "Published: January 19, 2022",
    "In the United States and the United Kingdom, job openings remain plentiful while workers have not fully returned to the labor market; the employment rate is below its pre-COVID level in both countries.",
    "High vacancy-to-unemployment ratios and elevated job quits coexist with an incomplete employment recovery.",
    "The Omicron wave may have a cooling effect on labor markets, potentially extending the trend.",
    "The broader trend has important implications for growth, inequality, and inflation: a sluggish employment recovery amid sustained labor demand could constrain economic growth while fueling wage increases and further inflation.",
    "Generosity of income support programs",
    "Mismatch between available jobs and jobseekers",
    "The “She-cession” (US-specific)",
    "Withdrawal of older workers",
    "United States (approximate attribution as of research period):",
    "United Kingdom (approximate attribution as of research period):",
    "Vacancies are highest among low-skill occupations while employment in these jobs remains below pre-2020 levels.",
    "The rise in voluntary quits—the “great resignation”—is greatest for low-skilled jobs, suggesting a possible change in worker preferences triggered by the pandemic.",
    "Outflow of foreign workers after Brexit, accelerated by the pandemic, reduced the number of potential jobseekers available to fill open vacancies.",
    "To minimize risk of persistent scarring to employment:",
    "Monitor whether older workers’ exits are permanent; large permanent retirements would imply longer-lasting labor supply effects with implications for growth and inflation.",
    "[New IMF staff research](https://www.imf.org/en/Publications/WP/Issues/2022/01/18/Has-COVID-19-Induced-Labor-Market-Mismatch-Evidence-from-the-US-and-the-UK-511917)",
    "[https://www.imf.org/wp-content/uploads/2022/01/Labor-Blog-chart-1.jpg](https://www.imf.org/wp-content/uploads/2022/01/Labor-Blog-chart-1.jpg)",
    "[https://www.imf.org/wp-content/uploads/2022/01/Labor-blog-chart-2.jpg](https://www.imf.org/wp-content/uploads/2022/01/Labor-blog-chart-2.jpg)"
  ],
  "alternates": {
    "markdown": "/en/blogs/articles/2022/01/19/why-jobs-are-plentiful-while-workers-are-scarce/index.md",
    "json": "/en/blogs/articles/2022/01/19/why-jobs-are-plentiful-while-workers-are-scarce/index.json",
    "bundleManifest": "/en/blogs/articles/2022/01/19/why-jobs-are-plentiful-while-workers-are-scarce/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-08-27T02:04:59.340Z"
}