COVID-19 and Human Capital: Cataclysm and Catalyzer (C4)

COVID-19 and Human Capital: Cataclysm and Catalyzer (C4)

The C4-project examines how the COVID-19 pandemic influences the decisions firms make regarding their human capital, how this varies across firms with different characteristics, and how these decisions affect individuals with different characteristics.


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The C4-Project is funded by the Research Council of Norway, and is conducted in partnership between NHH and the Federation of Norwegian Enterprise (Virke), and the Norwegian Union of Commerce and Office Employees (Handel og Kontor i Norge).

The project is a collaborative effort between the research centers FAIR and DIG. It started 01.10.2020 and ends 01.10.2022.

The motivation for the project is that the COVID-19 pandemic has had dramatic consequences for firms throughout the Norwegian economy. Even for firms not in lockdown, a steep decline in demand for goods and services forced a large number of firms to make dramatic changes to how they invest, deploy, and manage their human capital. This raises questions about how the pandemic impacts firms' human capital decisions, and the consequences this has - both for firms and individuals.

Independently of the crisis, firms were already (to varying extent) going through processes of digitalization. It seems quite clear that the pandemic will accelerate this digital transformation. It pushes a wide range of business activities online, some of which will lead to lasting changes in how both organizations and consumers behave. The crisis has encouraged firms to implement digital technologies earlier than anticipated, and it seems to have rewarded firms that were highly digitalized before it started. We therefore believe that to understand the economic- and labor market consequences of the COVID-19 pandemic, it is important to realize that human capital decisions following the crisis and the process of digital transformation of the economy, are deeply intertwined. This also provides a glimpse into future crises and recessions, since these will take place in an increasingly digitalized society.

The key to make progress on all these issues are two things. One is higher quality data. We need to be able to integrate data on characteristics of firms and industries, with data on the characteristics of individuals and government interventions in a common dataset. To better understand the dynamics of the crisis we also need real time data to observe changes as the crisis unfolds, rather than merely study retrospective data after the crisis has passed. The other key thing needed is an interdisciplinary group of researchers who can bring a range of different approaches and perspectives to the data. Our project aims to do both.