Search and Reallocation in the Covid-19 Pandemic: Evidence from the UK

The impact of the pandemic on the UK labour market has been extremely heterogeneous across occupations and industries. Using novel data on job search, we document how individuals adjust their job search in response to changing employment patterns across occupations and industries in the UK. We observe that workers changed their search direction in favour of expanding occupations and industries as the pandemic developed. However, non-employed workers are more attached to their previous occupations and workers with low education are more likely to target declining occupations. We also observe workers from declining occupations making fewer transitions to expanding occupations than those who start in expanding occupations, despite targeting these jobs relatively frequently. This suggests those at the margins of the labour market may be least able to escape occupations that declined during the pandemic.