Do Industries With High Workplace Flexibility See Lower Job Losses Due To COVID-19 Than Ones With Less Flexibility During The “Great Resignation?”

The “Great Resignation,” the ongoing trend of employees voluntarily leaving their jobs since spring 2021, is a response to the COVID-19 pandemic. The phenomenon may mostly be due to the large number of job openings combined with a lower unemployment rate. Despite a strong economic recovery from the United States, workers have continued to leave the job market. This paper aims to prove that industries with high workplace flexibility see lower job losses due to COVID-19 than ones with less flexibility during the “Great Resignation” in the United States. To answer this research question, I estimate a pooled OLS regression with industry and time-fixed effects. I control for interest rates, inflation rates, unemployment rate, industry, and four work-from-home flexibility measures. Using the economic model: Quits = f(COVID-19 cases, flexibility, macro conditions) as a baseline, I illustrate how the amount of worker quits in the United States are related to the relationship between the amount of U.S. COVID-19 cases, how much workplace flexibility there is within different industries and other macro conditions. I pull data from the Bureau of Labor Statistics (Job Openings and Labor Turnover Survey) looking at the quit rate in the United States by industry. Additionally, I track and pull COVID-19 cases at the national level from Johns Hopkins University Center for Systems Science and Engineering. Furthermore, I obtain data from the FRED, specifically Unemployment Rate, Consumer Price Index for All Urban Consumers: All Items in U.S. City Average, the Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, and Moody’s Seasoned AAA Corporate Bond Yield from 2017-2021. Lastly, to account for work from home flexibility, I use data from Dingel and Nieman (2020). I find that industries with more workplace flexibility have a smaller increase in quits due to COVID-19. The findings of this paper show that quits from jobs may also be influenced largely by the pandemic promoting flexibility within jobs, and individuals rather seek out jobs that provide greater flexibility within hours or work from home. Furthermore, the findings of this study suggest that if industries offer more flexibility regarding work-from-home then the worker quit rate will drop and the workers will more likely be immune to COVID-19. Lastly, these findings will have important implications regarding the future of work from home and its effects on the United States’ labor market.