The Value of Mobile Labor during Immobile Times: Evidence from the COVID-19 Pandemic

Abstract

We examine whether and how mobile labor influences firm resilience to the COVID exposure. Using a sample of U.S. firms for the period between January 20, 2020 and June 26, 2020, we find a robust, positive relation between labor mobility and firm resilience to the COVID exposure. Further, we find that the impact of labor mobility on firm resilience to the COVID exposure is more pronounced when employee layoff is high, asset redeployability is high, segment relatedness is high, and remote-work feasibility is high. These cross-sectional results suggest that mobile labor influences firm resilience to COVID exposure through three channels: with the COVID exposure, mobile employees can be redeployed to do additional work at a lower cost, to do alternative work more easily, and can better adapt to the new environment, which in turn helps their firms to stay resilient. Overall, our evidence points to the value of mobile labor during the COVID-19 pandemic and has implications for regulators and practitioners who have been exploring ways for firms to stay resilient during the pandemic.