Perspective: Health Care Has Not Been a Driver of Jobs Recovery in 2021

May 11, 2021

Ani Turner

In the spring of 2020, we saw that, unlike in previous recessions, the health sector did not serve as a backstop for economy-wide job losses, dropping 1.62 million jobs between February and April 2020. Through the first four months of 2021, we see that the health sector is also not playing its typical role as an engine of jobs recovery.

Figure 1 shows the cumulative growth in health care and non-health care jobs since the pre-pandemic peaks seen in February 2020. The fall in health care jobs was initially less severe, dropping 9.8% by April compared to a 15.3% drop in non-health jobs. Health care employment also initially came back more quickly than the rest of the economy. By the end of 2020, health care had regained about two-thirds of the jobs lost while nonhealth settings had regained about 54% of jobs lost.

However, in 2021, the gap narrowed. Health care employment dropped in January and then essentially plateaued. As of April 2021, health care is down 29,000 jobs compared to the end of 2020. Outside of health care, even though the first read on April job growth was much lower than anticipated, the economy has added more than 1.8 million jobs so far this year.

Figure 1: Cumulative Job Growth Since February 2020 (pre-pandemic peak)

In contrast to the health and non-health job growth patterns observed in 2020 and 2021, Figure 2 shows cumulative health care and non-health job growth for the comparable period (first 14 months) from the start of the Great Recession in December 2007. Not only did employment in health care not drop, but it continued to steadily grow even as non-health employment was still falling. 

Figure 2. Cumulative Job Growth from December 2007 through February 2009

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Beneath the top line figures, the current modest but unprecedented contraction in health employment is being driven by trends in hospitals and residential settings of care. Figure 3 breaks out cumulative job growth since February 2020 in the three major health care settings: hospitals, ambulatory care, and nursing and residential care.

Ambulatory care jobs were most impacted by the pandemic initially and fell very steeply (-17.1%) as this sector shut down like much of the service economy. But employment in these settings has come closest to fully rebounding, currently standing at 1.3% below February 2020 levels.

The impact of the pandemic on hospital jobs was slightly delayed and less dramatic but may be more lasting. Hospital employment is down by about 100,000 jobs since the pre-pandemic peak, but about one-third of this decline comes from the loss of 31,000 jobs during the first four months of 2021. Hospital employment now stands at 1.9% below February 2020 levels.

Finally, the pandemic appears to have accelerated a decline in nursing and residential care employment, which had been flat or slightly falling in recent years, but fell more steeply in April 2020. It continues to fall at a steady pace, now standing at 10% below February 2020 levels.

Figure 3: Cumulative Job Growth Since February 2020 (pre-pandemic peak)

Of course, March and April data are preliminary and may undergo revisions, and whatever “post-COVID” looks like, we are not there yet. The downward trend in residential care employment does appear to be meaningful, and we will be publishing a more in-depth study of trends in long-term care over the next few months.

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Altarum is a nonprofit organization that creates and implements solutions to advance health among at-risk and disenfranchised populations.

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Health Care Has Not Been a Driver of Jobs Recovery in 2021

Perspective

Ani Turner

Ani Turner  - MA

Senior Economist

Areas of Expertise
  • Health Spending
  • Health Equity
  • Health Workforce

With over 30 years of experience working with government, commercial, and philanthropic clients, Ani leads Altarum research and policy analyses in areas such as health spending and workforce and the economic impacts of investments in improving health and advancing racial equity. Ani holds a bachelor’s degree in mathematics and a master’s degree in applied economics with a concentration in labor economics, both from the University of Michigan.