“…This minimizes the risk of "anticipation effects." 1 Second, Italy was characterized by a large spatial heterogeneity in the COVID-19 spread (Gibertoni et al 2021), even across neighboring regions (Berta et al 2021). Our study relies on geographical variation in the diffusion of COVID-19, gauged through excess mortality measures (Msemburi et al 2023) at the Local Labor Market (LLM) level, 2 to identify the causal effect of COVID-19 on firms' labor demand.…”