Regional differences in the epidemic shock on the local labor market and its spread

Abstract

First, using the sequential linear panel data-estimation model and maps, we demonstrate the relocation of job-posting places, especially for part-time jobs. We use data on the number of job postings at the public employment security office in Japan. These changes in the posting places are clearly observable in the retail trade for part- and full-time jobs. In contrast, we do not find discernible relocation in the information-services industry. The impact of the COVID-19 shock varies by geographic location. However, if people's mobility rate, the number of infected people, or the declaration of the state of emergency are controlled for, the number of job postings differs among areas. Therefore, second, this study explores the factors that account for the differences in the number of job offers among areas. We find that industrial diversity increases the number of job postings for part- and full-time jobs in 2021, that is, one year after the first wave of the pandemic began. In contrast, industrial specialization has a negative impact in 2021. Higher rigidity of finance decreases the number of part-time job postings immediately after the first wave of the pandemic because local governments cannot provide various support measures to create jobs. However, this financial effect disappears with time. Furthermore, higher financial capability positively affects part-time job postings, although they are not efficient in creating full-time jobs. The unemployment rate in 2015 negatively affects the regional differences in job postings after 2021. Regarding whether firms seek regions with rich human resources, the result is unexpectedly unclear.