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New report out this morning - what has the latest lockdown done to the labour market, and what's next for policy? Written with @hcslaughter_ @kathleenhenehan @GregoryThwaites , and using our own survey data (kindly funded by @HealthFdn).
Quick summary:
Quick summary:
In headline terms, the labour market has been pretty steady through the winter. Unemployment was rising but looks like not much change since November.
That's of course, because JRS is doing its job. 4.5m furloughed in Jan.
Striking how much less furloughing in this lockdown compared to spring last year. 800k job losses, so it's mainly about higher activity in face of social distancing measures / businesses adapting etc.
Striking how much less furloughing in this lockdown compared to spring last year. 800k job losses, so it's mainly about higher activity in face of social distancing measures / businesses adapting etc.
The employment effects of the crisis continue to be mainly about sectors, which in turn is driving the big differences by age and pay.
New for this report is a decomposition of which factors are explaining those effects. It's about two thirds sectors, a quarter contract type, and a bit pay. Personal characteristics playing basically no role (acc to our surveys anyway).
That's most of our findings on January. But the new thing we try to talk about is the result of the crisis going on for a long time. We find 1.9m workers who were unemployed or fully furloughed in Jan, and who had been for 6 months+.
Many of those fully furloughed will return to work (esp if we get the withdrawal right). But some won't (1 in 6 furloughed workers expects to lose their job).
We argue that if they lose work, time on full furlough should count towards eligibility for long-term unemp support. Those that return to work will also feel lasting effects from the skills/experiences not gained (esp young people, whose wage growth / career dev is fastest).
Small bit of good news, we find no signs of a hit to labour supply / discouraged workers, like in the 80s.
Nor signs of people being pushed into early retirement. Of those age 55+, those on furlough were less likely to plan to stop working.
Nor signs of people being pushed into early retirement. Of those age 55+, those on furlough were less likely to plan to stop working.
On policy we argue (as @dminnes did last week) for a gradual phase out of JRS, based on sector-level restrictions, and via increased minimum hours (keeping employer contributions low to encourage job sharing).
Plenty more in the report, and here's the recording of the event, with discussion from @hcslaughter_ @abicadams and MPC's Michael Saunders
