![]() To simulate these wage losses, we consider several possible scenarios. Wage losses and lockdown incidence curvesīecause not all workers are able to perform their job at home and some activities are closed, there will be potential wage losses for a significant part of the labour force that cannot fully work during the lockdown. Table 1 Lockdown working ability in Europe Once essential and closed occupations are taken into consideration, the changes in wage inequality caused by the lockdown are difficult to foresee based only on the average level of ability to work under lockdown, and one needs to look at how potential wage losses are distributed. However, the correlation between the lockdown working ability index and the average annual salary in a country is positive but very small (0.06). ![]() Teleworking capability is strongly correlated with higher wages both across occupations and across average levels by country (r = 0.76). Education: There is a strong positive relationship between the level of education and the capacity to work under a lockdown in all European countries.Type of job: Temporary and part-time workers are in general worse-prepared than their permanent and full-time counterparts.Gender: Women are less affected by social distancing than men.In Table 1 we highlight that our index varies significantly not only by country but also by: This measure takes into account the level of teleworking for each occupation (Dingel and Neiman 2020) and whether the occupation is considered essential or closed.Īs shown in Figure 1, the average lockdown working ability index varies significantly across European countries with the Netherlands (0.61) the best prepared and Bulgaria (0.37) the worst prepared.įigure 1 Lockdown working ability index across Europe ![]() To measure the capability of each worker to keep active under the lockdown, we calculate a ‘lockdown working ability’ index of workers (see Palomino et al. Meanwhile, certain economic activities like hospitality are closed under a lockdown and working is not at all possible. Some occupations like health services and food sales are considered essential, so workers are not affected by their capacity to work from home. 2020), the lockdown and social distancing imposed by governments to limit the spread of COVID-19 have direct asymmetric effects on the labour market: in principle, only the jobs that can be done from home (‘teleworkable’) are unimpeded by the lockdown. Teleworking and lockdown ability to work in EuropeĮven without considering the subsequent effects that may occur on the demand side (del Rio-Chanona et al. The lockdown and partial closure of economic activities were crucial to stop the pandemic and save lives, but their economic effects are likely to diminish economic cohesion between and within European countries. We estimate that the burden of the pandemic will be disproportionately borne by low-wage earners which, in the absence of compensating policies, will significantly increase poverty and inequality across Europe. Our findings strongly support this statement (Palomino et al. 2020, McKibbin and Fernando 2020) and are likely to have distributional implications (Furceri et al. The economic effects of the pandemic, however, will not be equally distributed (Dorn et al. Asia will not have economic growth for the first time in 60 years, the US and European economies are projected to contract between 6% and 8% (International Monetary Fund 2020), and global job losses are estimated to be over 200 million (International Labour Organization 2020). The global economy is expected to shrink by 3% this year. The economic impact of COVID-19 is dramatic.
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