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The Challenges for Labour Market Policy during the COVID-19 Pandemic*

Costa Dias, M; Joyce, R; Postel-Vinay, F; Xu, X; (2020) The Challenges for Labour Market Policy during the COVID-19 Pandemic*. Fiscal Studies , 41 (2) pp. 371-382. 10.1111/1475-5890.12233. Green open access

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Abstract

The COVID-19 pandemic is having a dramatic economic impact in most countries. In the UK, it has led to sharp falls in labour demand in many sectors of the economy and to initial acute labour shortages in other sectors. Much more than in a typical downturn, the current crisis is not simply a general slowdown in economic activity but also a radical short-term shift in the mix of economic activities – of which an unknown, but possibly significant, amount will be persistent. The initial policy response has focused on cushioning the blow to families’ finances and allowing the majority of workers and firms to resume their original activities once the crisis subsides. These are crucial priorities. But there should also be a focus on reallocating some workers, either temporarily if working in shut-down sectors or permanently by facilitating transitions to sectors and jobs offering better prospects and facing labour shortages. The phasing-out of the furlough subsidies, which is projected to happen in Autumn 2020, brings this into even sharper focus since the alternative for many workers will be unemployment. Active labour market policy will need to be front and centre.

Type: Article
Title: The Challenges for Labour Market Policy during the COVID-19 Pandemic*
Open access status: An open access version is available from UCL Discovery
DOI: 10.1111/1475-5890.12233
Publisher version: https://doi.org/10.1111/1475-5890.12233
Language: English
Additional information: This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Keywords: labour market policy, wage subsidies, labour demand, job vacancies, labour supply, COVID‐19 pandemic
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/10106402
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