The Great Resignation vs. The Great Reallocation: Industry-Level Evidence

I t's been two years since the start of the COVID-19 pan- demic, and the U.S. economy has substantially recovered.The unemployment rate was 3.9% in December 2021, and real GDP growth has remained above 2% since 2020:Q2.Despite these positive indicators, there is growing sentiment that the pandemic has inflicted long-lasting effects on the labor market.Specifically, a recent, anecdotal impediment to employers has been the lack of available workers; news sources, political pundits, and economists alike are calling it the "Great Resignation"-a phrase stemming from the idea that, since the economy's recovery, a large quantity of workers have quit their jobs.People generally view the Great Resignation in a negative way, with the underlying connotation that quits are mostly harmful to the economy and that people do not want to work anymore.However, we should be careful when discussing the growing number of quits because it does not necessarily imply a worker has left the labor market or even entered unemployment; many quits are due to workers switching jobs.