Covid-19: wage subsidies and unemployment

Listen to the event

Governments across the developed world have invested huge amounts of money into policies designed to prop up household incomes while economies were shut down and workers were encouraged to stay at home.

But as a new IfG paper shows, some countries like the UK and many continental European countries have relied more heavily on wage subsidies, while others – like the US, Canada and Ireland – have increased support to those who have lost their jobs.

The UK government’s wage subsidies are by far the largest element of support that the government has provided to the economy, with a quarter of the UK labour force receiving support from the government in this way.

This discussion looked at what effect these different coronavirus-related labour market policies have had on businesses, employment and the workforce and how the policies need to be adapted to enable and encourage a return to work and reopening the economy – including what lessons the UK government can learn from experience elsewhere.

Panellists:

• Antoine Bozio, Director of the Institut des Politiques Publiques
• Karen Dynan, Professor of the Practice of Economics at Harvard University
• Barra Roantree, Economist at the Economic and Social Research Institute
• Martin Sandbu, European Economics Commentator for the Financial Times

The event was chaired by Dr Gemma Tetlow, Chief Economist, Institute for Government.

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