The coronavirus pandemic shocked the labor market. In a single month – April 2020 – more than 19 million workers lost their jobs. The size of the private sector workforce shrank by 15 percent.

The recovery has been slow but steady. People are rejoining the workforce and we’re inching toward pre-pandemic levels of employment. But that progress masks the fact that more than two years later, many workers remain on the sidelines. 

This research note examines hiring data and worker behavior to find out what’s been holding the labor recovery back. What we found was an unprecedented imbalance between labor supply and demand.