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Coronavirus and unemployment: a five nation comparison

To cushion the blow of the pandemic, governments have pumped large amounts of money into labour market policies.

The coronavirus pandemic has led to widespread job losses across most advanced economies, as governments have mandated ‘lockdowns’ in an effort to stop the spread of the disease. No country has managed to avoid rising unemployment. To cushion the blow, governments have pumped large amounts of money – several per cent of GDP – into labour market policies. The UK government, for example, is expected to spend over £80 billion (or 3.7% of annual GDP) on such policies over the next eight months. But the approaches taken have differed, and the policies chosen appear to have had important consequences for workers.

Some countries have experienced large increases in unemployment, while others have sustained links between employers and employees, even though all have experienced large economic contractions. This is hugely important, both for assessing the effectiveness of policies so far and in thinking about the task ahead as governments attempt to release the lockdown restrictions and get their economies going. This paper compares the experiences of five countries that illustrate how different policy decisions have been associated with different labour market outcomes, setting up very different future challenges.

Johnson government
Institute for Government

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