Racial, Ethnic, and Gender Disparities in Labor Market Outcomes in the Aftermath of the COVID-19 Pandemic

Abstract

Using longitudinal data from the Understanding America Study (UAS) covering the onset and aftermath of the COVID-19 pandemic, we examine the evolution of sex and racial/ethnic disparities in employment status and work arrangements. We document differences across workers in the type of work they engage in (full/part-time, gig work), ability/possibility to work from home (WFH), and willingness to pay for more days of WFH. We relate WFH arrangements to job satisfaction, turnover intentions, and workers’ well-being. We find that the labor market turmoil induced by the pandemic in 2020 predominantly impacted minority workers, particularly Blacks and Hispanics, who faced higher transitions out of full-time employment compared to whites. These differences narrowed over time, and full-time employment levels for Blacks and Hispanics rebounded to prepandemic standards by 2023. However, disparities in work arrangements are substantial and persistent. After adjusting for socioeconomic factors and occupation type, female, Black, and Hispanic workers show a stronger preference for more WFH days than their employers offer or allow compared to male and white workers. Accordingly, they are significantly more likely to accept a pay cut of 5% or more for an additional WFH day per week. We detect a significant positive association between workplace/schedule flexibility and job satisfaction. This relationship is more pronounced for women, who exhibit higher job satisfaction when their WFH preferences are met compared to men. Employees with unfulfilled WFH preferences are more inclined to seek new job opportunities, exhibit lower mental health, and report worse work-life balance.