COVID-19 and layoffs in US start-ups 

Abstract

The double negative shock on supply and demand following the COVID-19 health crisis has strongly impacted the labor market with an unequal distribution. Unlike earlier empirical works that explain the unequal exposure to layoffs following the crisis by socioeconomic and geographic factors, while distinguishing between core and non-core industries, we focus our analysis on layoffs in Start-ups in the United States of America (USA) by branch of activity. We compute the probability of a start-up worker being laid off according to the branch of activity in which he or she works, using a binary logistic regression. The result shows that the health shock did not impact all the branch of activities in the same way and with the same extent. The “Media” activity is by far the most affected by the layoffs. The “Infrastructure”, “Construction”, “Transportation”, “Product”, “Support”, “Education”, “Finance”, “Travel” and “Marketing” activities were also affected, while the “Food” activity was spared due to the fact that it was maintained during the crisis.