HOW LOCKDOWN CAUSES A MISSING GENERATION OF START UPS AND JOBS

Abstract

This paper explores the impact of the COVID-19 lockdown on aggregate employment in Belgium. To this end, we use microdata of all Belgian frms and apply a machine learning-based approach to simulate the impact of the lockdown on employment growth under various economic scenarios. In doing so, we distinguish between start-ups and incumbent frms with both short and long-term efects. In the short term, we expect to see signifcant losses of employment coming mainly from mature incumbent frms. In the long term, the missing generation of start-ups formed during the lockdown will have a signifcant and growing efect of slowing down the employment growth even a decade after the lockdown.