Free DP Download 27 August 2020 - INSIGHTS FROM THE UK’S COVID-19 FURLOUGH SCHEME

Thursday, August 27, 2020

FURLOUGHING
Abigail Adams, Christopher Rauh, Teodora Boneva, Marta Golin  
CEPR DP No. 15194 | August 2020

Over 9 million jobs were furloughed in the UK during the Coronavirus pandemic. Women were significantly more likely to be furloughed, male workers routinely flouted furlough rules, and women were less likely to have their salary topped up beyond the 80% subsidy paid for by the government.  

These are the among the findings of a new CEPR study by Abigail Adams and colleagues, which documents which UK workers were most likely to be furloughed and analyses variation in the terms on which they furloughed. Among the findings:

  •  Women were significantly more likely to be furloughed. Inequality in care responsibilities played a key role: mothers were 10 percentage points more likely than fathers to initiate the decision to be furloughed (as opposed to it being fully or mostly the employer's decision) but there is no such gender gap amongst childless workers. 
  • The prohibition of working whilst furloughed was routinely ignored, especially by men who can do a large proportion of their work tasks from home. 
  • Women were less likely to have their salary topped up beyond the 80% subsidy paid for by the government. 
  • Furloughed workers without employer-provided sick pay have a lower willingness to pay to return to work, as do those in sales and food preparation occupations. 
  • Compared to non-furloughed employees, furloughed workers are more pessimistic about keeping their job in the short to medium run and are more likely to be actively searching for a new job even when controlling for detailed job characteristics.

These results have important implications for the design of short-time work schemes and the strategy for effectively reopening the economy.

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