Distributional effects of COVID-19

Using Italian Labour Force Survey data for the period 2019Q1-2020Q4 and applying quantile regression model accounting for sample selection bias, the paper investigates the effects of the first wave of the COVID-19 pandemic on the wage distribution of employees, exploiting differences across sectors and by working from home arrangement. The findings reveal that the pandemic seems to positively affect wages of the entire workforce. However, this short-term advantage might be temporary as potentially driven by occupational changes in employment composition, whereas teleworking arrangement entails a wage premium for all workers. Low paid workers, employed in hotel/restaurant sector and not teleworking during the outbreak, face a reduction in wages (- 13.7%), while employees of public administration and education sectors exhibit a wage premium. When considering the joint effect of COVID-19 and working from home arrangement, estimates show that, despite few exceptions, wages of teleworking employees have been not affected by the coronavirus. Finally, we also control for self-selection issue by implementing the inverse probability weighting estimator.

Did a successful fight against COVID-19 come at a cost? Impacts of the pandemic on employment outcomes in Vietnam.

Despite its low middle-income status, Vietnam has been widely praised for its success in the fight against early waves of the COVID-19 pandemic, with a low mortality rate of approximately 100 deaths out of a population of less than 100 million by the end of 2020. We add to the emerging literature on COVID-19 effects on the labor market for poorer countries by analyzing rich individual-level data from Vietnam's Labor Force Surveys spanning 2015 to 2020. We find post-pandemic increases in unemployment and temporary layoff rates alongside decreases in employment quality. Monthly wages declined even as the proportion of workers receiving below-minimum wages substantially increased, contributing to sharply rising wage inequality. Our findings suggest that more resources should be allocated to protect vulnerable workers, especially as the pandemic continues to cause increasingly severe damage to the global economy.

Living on the Edge: Institutional Supports and Perceptions of Economic Insecurity Among People with Disabilities and Chronic Health Conditions

The growth of precarious employment coupled with declining social safety nets has increased economic insecurity among many households, leaving them without key resources to weather financial hardships like those brought on by the COVID-19 pandemic. This has been especially true for people whose disabilities, health statuses, and already precarious economic situations have made them extra vulnerable. We combine survey (N = 1,027) and interview (N = 50) data for Canadians with disabilities and chronic health conditions to explore how mobilizing four types of institutional supports connected to labor markets, financial markets, family, and government influenced perceptions of current and future insecurity during crisis. Because employment income was only available to about half of our respondents, many relied on a combination of savings, family supports, and government programs to make up the difference. This paper demonstrates how marginalized groups make use of different supports within liberal welfare states during times of crisis.

Novel welfare state responses in times of crises: the COVID-19 crisis versus the Great Recession

Using microsimulation tools, we explore the social policy responses to the Great Recession and the COVID-19 crisis, and their impact on preserving living standards in Ireland. During the Great Recession, the focus was on cost reduction. By contrast, during the COVID-19 crisis, the focus was on mitigating the impact on household incomes. In addition, an innovation in joint public and private responses emerged through social partnership. We find a stronger policy response during the COVID-19 crisis than the Great Recession. The COVID-19 crisis was more rapid, leaving more individuals out of work, thus family support was weaker. This was compensated by stronger private support through social partnership. Consequently, those with lower incomes had larger disposable incomes at the onset of the crisis;an effect that reduced with policy learning. We find increasing trust in public institutions during the COVID-19 crisis as opposed to a decline during the Great Recession.

The pandemic and private registered employment in Argentina. An analysis of wage inequality on a regional and sectoral level

The economic and social crisis caused by the COVID-19 has marked intense changes in the Argentine labor market, deepening the adverse effects of the "pre-pandemic crisis". The impacts in terms of wages and employment have been notable, however, this trend has not been homogeneous in the different regions of the country or by branches of activity. To contribute to a characterization of labor income dynamics in Argentina, this research focuses on the impact of the COVID-19 crisis on the regional wage inequality of private registered employees, also considering the contribution of the sectoral disparities within each region. For the measurement and analysis, we will use the Theil statistical Index. This investigation is carried out within the framework of the PISAC-COVID-19-00085 Project "Comparative Regional Research Program: Recent changes in the Argentine social structure: work, income and social inequality in times of pandemic and post-pandemic".

Heterogeneous Labor Market Impacts of the COVID-19 Pandemic.

The authors study the distributional consequences of the COVID-19 pandemic's impact on employment, both during the onset of the pandemic and over subsequent months. Using cross-sectional and matched longitudinal data from the Current Population Survey, they show that the pandemic has exacerbated pre-existing inequalities. Although employment losses have been widespread, they have been substantially larger-and more persistent-in lower-paying occupations and industries. Hispanics and non-White workers suffered larger increases in job losses, not only because of their over-representation in lower-paying jobs but also because of a disproportionate increase in their job displacement probability relative to non-Hispanic White workers with the same job background. Gaps in year-on-year job displacement probabilities between Black and White workers have widened over the course of the pandemic recession, both overall and conditional on pre-displacement occupation and industry. These gaps are not explained by state-level differences in the severity of the pandemic nor by the associated response in terms of mitigation policies. In addition, evidence suggests that older workers have been retiring at faster rates.

How to reverse a negative asymmetric labor productivity shock in the European Union? A directed technical change analysis with fiscal and monetary policies

We developed a directed technical change growth model with two stylized (European) countries. Although Covid19 had several economic implications, it caused a negative asymmetric shock in EU member states’ labor productivity, which is slightly stronger in the impoverished South. This instrumental option arose from the need to isolate this effect from all others. The shock causes an immediate fall in the Union’s growth rate and inflation rate. The fiscal policy, driven by the country’s governments and materialized through direct and indirect subsidies to R&D activity, reinforces its production, technological knowledge, and wage level. The effects are stronger when conducted by North/Germany. The monetary policy, led by the central bank through a decline in the nominal interest rate, influences the R&D activity through Cash-in-Advance constraints and is limited by the zero nominal interest rate. The inflation rate is positively affected by monetary-transaction costs and the way money influences the utility function.

Wage inequality and poverty effects of lockdown and social distancing in Europe.

Social distancing and lockdown measures taken to contain the spread of COVID-19 may have distributional economic costs beyond the contraction of GDP. Here we evaluate the capacity of individuals to work under a lockdown based on a Lockdown Working Ability index which considers their teleworking capacity and whether their occupation is essential or closed. Our analysis reveals substantial and uneven potential wage losses across the distribution all around Europe and we consistently find that both poverty and wage inequality rise in all European countries. Under four different scenarios (2 months of lockdown and 2 months of lockdown plus 6 months of partial functioning of closed occupations at 80%, 70% and 60% of full capacity) we estimate for 29 European countries an average increase in the headcount poverty index that goes from 4.9 to 9.4 percentage points and a mean loss rate for poor workers between 10% and 16.2%. The average increase in the Gini coefficient ranges between 3.5% to 7.3% depending on the scenario considered. Decomposing overall wage inequality in Europe, we find that lockdown and social distance measures produce a double process of divergence: both inequality within and between countries increase.