Covid-19—Pandemics and the labor market
We are facing unprecedented times as the coronavirus—or “Covid-19,” the disease associated with the virus—pandemic sweeps the globe. In the short term this means extreme disruption for citizens and labor markets as countries impose travel restrictions and nationwide lockdowns to slow the spread of the virus and prevent it from overwhelming health services. Governments are having to find extraordinary ways to protect workers and their economies from financial hardship and potential collapse. Recession would appear to be inevitable. Citizens themselves are also experiencing exceptional limits on their movements, which could have overwhelming effects on their health and well-being. But the full effects of the crisis are as yet unknown and may take many years of analysis before they are fully understood.
IZA Discussion Papers:
IZA publishes a series of Discussion Papers on Covid-19. Here is a selection of the latest:
- Dual Circulation and Population Mobility during the Pandemic in China, by Wang-Sheng Lee, Trang My Tran, Lamont Bo Yu
- Pandemic Depression: COVID-19 and the Mental Health of the Self-Employed, by Marco Caliendo, Daniel Graeber, Alexander Kritikos, Johannes Seebauer
- Working from Home during a Pandemic – A Discrete Choice Experiment in Poland, by Piotr Lewandowski, Katarzyna Lipowska, Mateusz Smoter
- The Short-Term Effect of the COVID-19 Crisis on Employment Probabilities of Labour-Market Entrants in the Netherlands, by Henri Bussink, Tobias Vervliet, Bas ter Weel
- Pandemic-Era Uncertainty, by Brent Meyer, Emil Mihaylov, Jose Maria Barrero, Steven J. Davis, David Altig, Nicholas Bloom
Visit IZA's COVID-19 and the Labor Market site for further content on the pandemic.
See National responses to Covid-19 for a compilation of content looking at the effects of the pandemic on individual countries or cities.
IZA World of Labor content:
Job loss from Covid-19 was greater among immigrants than the native-born in most developed countriesHugh Cassidy, February 2022The labor market disruptions due to the Covid-19 pandemic and lockdowns impacted immigrant workers more severely than native-born workers in the US, Canada, Australia, and most EU countries. Immigrant workers in most of these countries were more vulnerable to the pandemic since they were more likely to be employed in jobs that are not as easy to perform remotely. The labor market recovery for both groups in the US was rapid, and by Fall 2020, the employment gaps between immigrant and native-born workers, both for men and women, had returned to pre-pandemic levels.MoreLess
The transformations of the French labor market, 2000–2021Philippe Askenazy, February 2022France has the second largest population of countries in the EU. Since 2000, the French labor market has undergone substantial changes resulting from striking trends, some of which were catalyzed by the Great Recession and the Covid-19 crisis. The most interesting of these changes have been the massive improvement in the education of the labor force (especially of women), the resilience of employment during recessions, and the dramatic emergence of very-short-term employment contracts (less than a week) and low-income independent contractors, which together have fueled earnings inequality.MoreLess
Health effects of job insecurity Updated
Job insecurity adversely affects health, but employability policies and otherwise better job quality can mitigate the effectsFrancis Green, December 2020The fear of unemployment has increased around the world in the wake of Covid-19. Research has shown that job insecurity affects both mental and physical health, though the effects are lower when employees are easily re-employable. The detrimental effects of job insecurity could be partly mitigated if employers improved other aspects of job quality that support better health. But as job insecurity is felt by many more people than just the unemployed, the negative health effects during recessions are multiplied and extend through the majority of the population. This reinforces the need for effective, stabilising macroeconomic policies, most especially at this time of pandemic.MoreLess
Temporary government schemes can have a positive economic effectPierre Cahuc, May 2019Government schemes that compensate workers for the loss of income while they are on short hours (known as short-time work compensation schemes) make it easier for employers to temporarily reduce hours worked so that labor is better matched to output requirements. Because the employers do not lay off these staff, the schemes help to maintain permanent employment levels during recessions. However, they can create inefficiency in the labor market, and might limit labor market access for freelancers and those looking to work part-time.MoreLess
Jobs can change quickly from full- to part-time status, especially during economic downturnsDaniel Borowczyk-Martins, October 2017The share of workers employed part-time increases substantially in economic downturns. How should this phenomenon be interpreted? One hypothesis is that part-time jobs are more prevalent in sectors that are less sensitive to the business cycle, so that recessionary changes in the sectoral composition of employment explain the increase in part-time employment. The evidence shows, however, that this hypothesis only accounts for a small part of the story. Instead, the growth of part-time work operates mainly through reductions in working hours in existing jobs.MoreLess
Penalties may last ten years or more, especially for high-educated youth and in rigid labor marketsBart Cockx, August 2016The Great Recession that began in 2008–2009 dramatically increased youth unemployment. But did it have long-lasting, adverse effects on the careers of youths? Are cohorts that graduate during a recession doomed to fall permanently behind those that graduate at other times? Are the impacts different for low- and high-educated individuals? If recessions impose penalties that persist over time, then more government outlays are justified to stabilize economic activity. Scientific evidence from a variety of countries shows that rigid labor markets can reinforce the persistence of these setbacks, which has important policy implications.MoreLess