The Impact of COVID 19 on Economic Inequality and Employment Progression
Lead Research Organisation:
University of Oxford
Department Name: Economics
Abstract
COVID-19 is not only a global health pandemic; it has brought whole sectors of the economy grinding to a halt. To provide timely information on the emerging impacts of the current crisis, we collected novel survey data from a representative sample of UK workers on 25th March 2020, finding large and significant differences in the impact of the economic disruption across workers of different income levels, ages, and those employed under different work arrangements.
We seek funding for five follow-up waves of survey data to enable the impacts of the crisis on different workers to be tracked and to assess the effectiveness of different policies aimed to smooth the effect of containment measures on living standards.
This research is of first order policy importance; the fiscal response has been unprecedented, but concern remains that assistance is not getting to the most in need. Further, the impact that we have already identified on young workers will call for a targeted set of future policy proposals to ensure that any impact on them is not permanent. The analysis possible with the data we collect will enable us quickly to understand whether interventions are well targeted and inform the design of labour market policy.
We seek funding for five follow-up waves of survey data to enable the impacts of the crisis on different workers to be tracked and to assess the effectiveness of different policies aimed to smooth the effect of containment measures on living standards.
This research is of first order policy importance; the fiscal response has been unprecedented, but concern remains that assistance is not getting to the most in need. Further, the impact that we have already identified on young workers will call for a targeted set of future policy proposals to ensure that any impact on them is not permanent. The analysis possible with the data we collect will enable us quickly to understand whether interventions are well targeted and inform the design of labour market policy.
Organisations
Publications
Abi Adams-Prassl
(2020)
Inequality in the Impact of the Coronavirus Shock: Evidence from Real Time Surveys
Adams-Prassl A
(2020)
Inequality in the impact of the coronavirus shock: Evidence from real time surveys
in Journal of Public Economics
Adams-Prassl A
(2021)
The Value of Sick Pay
Adams-Prassl A
(2020)
Inequality in the Impact of the Coronavirus Shock: Evidence from Real Time Surveys
Adams-Prassl A
(2022)
Perceived Returns to Job Search
Adams-Prassl A
(2023)
The value of sick pay
Adams-Prassl A
(2022)
The impact of the coronavirus lockdown on mental health: evidence from the United States
in Economic Policy
Adams-Prassl A
(2023)
The value of sick pay
in European Economic Review
Adams-Prassl A
(2023)
Perceived returns to job search
Adams-Prassl A
(2020)
The COVID-19 Economic Crisis
in Fiscal Studies
| Description | The research funded through the grant has so far resuted in four published papers, with another two papers submitted. We showed that the economic shock resulting from the pandemic did not affect all groups equally. A summary of our four published papers are: 1/ Inequality in the impact of the coronavirus shock: Evidence from real time surveys: We present real time survey evidence from the UK, US and Germany showing that the immediate labor market impacts of Covid-19 differ considerably across countries. Employees in Germany, which has a well-established short-time work scheme, are substantially less likely to be affected by the crisis. Within countries, the impacts are highly unequal and exacerbate existing inequalities. Workers in alternative work arrangements and who can only do a small share of tasks from home are more likely to have lost their jobs and suffered falls in earnings. Women and less educated workers are more affected by the crisis. 2/ Furloughing: Over nine million jobs were furloughed in the United Kingdom during the coronavirus pandemic. Using real-time survey evidence from the UK in April and May 2020, we document which workers were most likely to be furloughed and we analyse variation in the terms on which they furloughed. We find that women were significantly more likely to be furloughed. Inequality in care responsibilities seems to have played a key role: mothers were 10 percentage points more likely than fathers to initiate the decision to be furloughed (as opposed to it being fully or mostly the employer's decision) but we find no such gender gap amongst childless workers. The prohibition of working whilst furloughed was routinely ignored, especially by men who can do a large percentage of their work tasks from home. Women were less likely to have their salary topped up beyond the 80 per cent subsidy paid for by the government. Considering the future, furloughed workers without employer-provided sick pay have a lower willingness to pay to return to work, as do those in sales and food preparation occupations. Compared with non-furloughed employees, furloughed workers are more pessimistic about keeping their job in the short to medium run and are more likely to be actively searching for a new job, even when controlling for detailed job characteristics. These results have important implications for the design of short-time work schemes and the strategy for effectively reopening the economy. 3/ The impact of the coronavirus lockdown on mental health: evidence from the US: The coronavirus outbreak has caused significant disruptions to people's lives. We exploit variation in lockdown measures across states to document the impact of stay-at-home orders on mental health using real time survey data in the US. We find that the lockdown measures lowered mental health by 0.083 standard deviations. This large negative effect is entirely driven by women. As a result of the lockdown measures, the existing gender gap in mental health has increased by 61%. The negative effect on women's mental health cannot be explained by an increase in financial worries or caring responsibilities. 4/ Work that can be done from home: evidence on variation within and across occupations and industries: Using large, geographically representative surveys from the US and UK, we document variation in the percentage of tasks workers can do from home. We highlight three dimensions of heterogeneity that have previously been neglected. First, the share of tasks that can be done from home varies considerably both across as well as within occupations and industries. The distribution of the share of tasks that can be done from home within occupations, industries, and occupation-industry pairs is systematic and remarkably consistent across countries and survey waves. Second, as the pandemic has progressed, the share of workers who can do all tasks from home has increased most in those occupations in which the pre-existing share was already high. Third, even within occupations and industries, we find that women and workers with less stable work arrangements can do fewer tasks from home. Using machine-learning methods, we extend our working-from-home measure to all disaggregated occupation-industry pairs. |
| Exploitation Route | Our work has been drawn upon in multiple Select Committee, Bank of England, and European Commission and has been cited well over 1000 times. |
| Sectors | Government, Democracy and Justice |
| URL | https://sites.google.com/view/covidinequality/home |
| Description | Our study was one of the first to provide real-time survey evidence on the impact of the covid-19 recession om UK workers. Throughout the summer of 2020, we regularly engaged with analysts from Government departments including BEIS, Treasury, DWP and the National Audit Office in order to inform their own analysis and policy proposals. Abi Adams-Prassl was invited to give oral evidence to the Women and Equalities Select Committee in July 2020 and became a Specialist Advisor to the Committee in September 2020. She actively engaged with the committee in drawing together the emerging evidence base on gender inequality in the economic impact of the pandemic. Our findings from our two academic publications were cited repeatedly in the eventual report. We have been invited to contribute to the World Health Organisation's Independent Panel town hall "Exchange" meeting on the gendered impact of the pandemic, the outcomes of which will inform key themes in the Panel's Program of Work and contribute to the Independent Panel's report findings |
| First Year Of Impact | 2020 |
| Sector | Communities and Social Services/Policy,Government, Democracy and Justice |
| Impact Types | Societal,Economic,Policy & public services |
| Description | Oral Evidence to Women and Equalities Select Committee |
| Geographic Reach | National |
| Policy Influence Type | Contribution to a national consultation/review |
| URL | https://committees.parliament.uk/event/1419/formal-meeting-oral-evidence-session/ |
| Description | Specialist Advisor to Women and Equalities Select Committee on Gendered Economic Impact of Covid |
| Geographic Reach | National |
| Policy Influence Type | Membership of a guideline committee |
| URL | https://committees.parliament.uk/work/319/unequal-impact-coronavirus-and-the-gendered-economic-impac... |
| Description | Appearences on BBC News, Newsnight, Radio 4 Briefing Room, BBC 4 More or Less, 2 x The Economist podcast |
| Form Of Engagement Activity | A broadcast e.g. TV/radio/film/podcast (other than news/press) |
| Part Of Official Scheme? | No |
| Geographic Reach | National |
| Primary Audience | Public/other audiences |
| Results and Impact | Repeated media requests on the impact of the pandemic on inequality and on the relative merits of different policy measures |
| Year(s) Of Engagement Activity | 2020,2021 |
| Description | Discussion of findings and feedback on Methodology with National Audit Office Economists |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | National |
| Primary Audience | Policymakers/politicians |
| Results and Impact | We explained our findings and methodology concerning work while furloughedf to five analysts from the National Audit Office. We then gave feedback on their proposed analysis. |
| Year(s) Of Engagement Activity | 2020 |
| Description | European Commission Annual Research Conference |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Policymakers/politicians |
| Results and Impact | Invited lecture at the European Commission's Annual Research Conference. This included wider networking with members of the policymaking community. |
| Year(s) Of Engagement Activity | 2021 |
| URL | https://ec.europa.eu/economy_finance/arc2021/index.html |
| Description | OECD webinar on inequality and wellbeing |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Professional Practitioners |
| Results and Impact | Webinar on the impact of covid on inequality and employment progression with discussions by representatives from trade unions and employer groups. Over 100 people attended. |
| Year(s) Of Engagement Activity | 2021 |
| URL | https://www.oecd.org/wise/events/WISE-Webinar-Series-Covid-and-Inequality-Economic-Inequality-and-Em... |
| Description | Panel aimed at Conservative MPs run by Joseph Rowntree Foundation |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | National |
| Primary Audience | Policymakers/politicians |
| Results and Impact | Panel on inequality, poverty and job loss aimed at Conservative MPs and those working in social justice. |
| Year(s) Of Engagement Activity | 2021 |
| Description | Panel on Covid & Inequality at Talking Economics event |
| Form Of Engagement Activity | Participation in an activity, workshop or similar |
| Part Of Official Scheme? | No |
| Geographic Reach | National |
| Primary Audience | Public/other audiences |
| Results and Impact | Panel on inequality as part of the Talking Economics festival to educate the general public and practitioners on key economic issues. This was covered by the FT and written up on blog posts on the Economics Observatory site. |
| Year(s) Of Engagement Activity | 2021 |
| URL | https://www.economicsobservatory.com/events |
| Description | Presentation to BEIS, DWP and Treasury economists on labour market impacts of the pandemic |
| Form Of Engagement Activity | A talk or presentation |
| Part Of Official Scheme? | No |
| Geographic Reach | National |
| Primary Audience | Policymakers/politicians |
| Results and Impact | Provided BEIS economists with early evidence from surveys run through the grant and discussed our findings significance for labour market policy. |
| Year(s) Of Engagement Activity | 2020,2021 |
| Description | VoxEU blog posts on inequality in the impact of the recession |
| Form Of Engagement Activity | Engagement focused website, blog or social media channel |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Policymakers/politicians |
| Results and Impact | VoxEU blog posts on inequality in the impact of the recession (8 April 2020) and changes in working from home (2 September 2020) |
| Year(s) Of Engagement Activity | 2020 |
| URL | https://voxeu.org/article/large-and-unequal-impact-covid-19-workers |
| Description | VoxEU podcast on Furloughing |
| Form Of Engagement Activity | A broadcast e.g. TV/radio/film/podcast (other than news/press) |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Professional Practitioners |
| Results and Impact | VoxEU podcast on Furloughing. Had requests from special advisors to the Treasury for the transcript of the piece. |
| Year(s) Of Engagement Activity | 2020 |
| URL | https://voxeu.org/vox-talks/what-next-uks-furloughed-workers |
| Description | WHO and Women in Global Health panel on Covid-19 and Gender |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Policymakers/politicians |
| Results and Impact | "The Gendered Impact of COVID-19" was part of the series of WHO's Independent Panel town hall "Exchange" meetings, which are aimed at hearing from people working on the frontlines of the pandemic. The outcomes will inform key themes in the Panel's Program of Work and contribute to the Independent Panel's report findings. |
| Year(s) Of Engagement Activity | 2021 |
| URL | https://theindependentpanel.org/event/an-exchange-the-gendered-impact-of-covid-19/ |