For more information visit Skatteforsk - Centre for Tax Research.
Abstract
We examine employment effects of the COVID-19 crisis in Norway from March 2020 through June 2022: during the initial lockdown, through the subsequent recovery, and after the dust had settled. While we identify large and socially skewed effects of the crisis through its early phases, we find no long-term effects on employees exposed to early risk of job loss. For those employed at the onset of the pandemic, both the level and the sosioeconomic composition of employment quickly returned to normal. In contrast, we find considerable negative long-term employment effects on people who were neither in employment nor in education when the crisis hit. We argue that these patterns can be explained by social insurance policies that gave priority to protecting existing jobs and to distribute benefits to those who were temporarily laid off. Given the extreme increase in the social insurance caseload, an almost unavoidable side effect was reduced capacity for providing services to the already non-employed.
Authors: Annette Alstadsæter (Skatteforsk - Centre for Tax Research, Norwegian University of Life Sciences), Bernt Bratsberg (Ragnar Frisch Centre for Economic Research), Simen Markussen (Ragnar Frisch Centre for Economic Research), Oddbjørn Raaum (Ragnar Frisch Centre for Economic Research), Knut Røed (Ragnar Frisch Centre for Economic Research)
Keywords: Labor Demand Shock; COVID-19; Employment; Social Gradient