COVID-19 is a public health crisis that has caused serious disruption in our economy. Statistics Canada estimates that more than one million jobs were lost between February and March 2020, with many more experiencing other forms of disruptions in their work. Previous research suggests that larger firms, due to their structural and organizational differences, respond differently to economic shocks than smaller firms. Is this difference reflected in their response to COVID-19?
Our analysis of the March Labour Force Survey (LFS) clearly shows that large firms responded differently. Employees working in larger firms experienced relatively fewer employment losses, demonstrating a larger firm’s ability to withstand the initial impact of the pandemic.
We also identified a number of notable employment trends within the numbers, some of which include:
- Job loss rates experienced by women were disproportionately higher at smaller firms
- The magnitude of layoffs for younger people were high for all firm sizes – however, larger firms did not experience employment losses among those of core working age. We did see a reduction in the number of workers aged 65+ in all firm sizes, likely reflecting increased levels of retirement.
- Recent immigrants working in firms with fewer than 20 people saw significantly higher unemployment numbers than non-immigrants.
- Firm size effects vary by industry, but Retail and Food and Accommodation industries saw negative changes in employment across all firm sizes.
- Employment changes across businesses in major metropolitan areas vary because of differences in the timing of closures. However, it is clear that small businesses were impacted the most.