Intensified by the COVID-19 pandemic, online labour markets are at the core of the economic and policy debate about the future of work and the conditions under which we work online. We analyse the effects of COVID-19 related mobility restrictions on the demand, supply and hiring outcomes for remote work relative to on-site work. We benefit from the fact that the implementation of stay-at-home requirements varies by country, time and level. We use company data from a large European online labour market. Our results suggest that the stay-at-home requirements had a positive effect on the demand, supply and hiring of remote work relative to on-site work. We also find that the effect of the stay-at-home requirements on the demand, supply and hiring of remote work relative to on-site work varies substantially over time. Additional findings suggest that the stay-at-home effect is non-linear for the demand and supply of remote work and linear for the hiring of remote work. Overall, our results suggest that the flexibility provided by online labour markets may facilitate the adaptation of labour demand and labour supply to unpredicted situations where mobility is restricted.
Mueller-Langera, F and E Gomez-Herrera (2021), ‘Mobility Restrictions and Remote Work: Empirical Evidence on Demand and Supply on a European Online Labour Market‘, COVID Economics 63, CEPR Press, Paris & London. https://cepr.org/publications/covid-economics-issue-63#392514_392939_390689
We use cross-country panel data to examine the effects of a variety of nonpharmaceutical interventions used by governments to suppress the spread of coronavirus disease (COVID-19). We find that while lockdown measures lead to reductions in disease transmission rates as captured by the reproduction number, R_t, gathering bans appear to be more effective than workplace and school closures, both of which are associated with large declines in gross domestic product. Further, our estimates suggest that stay-at-home orders are less effective in countries with larger family size and in developing countries. We also find that incentives are very important, as efforts at ramping up testing and tracing COVID-19 cases are more effective in controlling the spread of disease in countries with greater coverage of paid sick leave benefits. As future waves of the disease emerge, the use of more targeted and better incentivized measures can help keep the epidemic controlled at lower economic cost.
Velarde, O, D Raitzer, R Hasan, R Lavado and L Chen (2021), ‘What Works to Control COVID-19? Econometric Analysis of a Cross-country Panel‘, COVID Economics 63, CEPR Press, Paris & London. https://cepr.org/publications/covid-economics-issue-63#392514_392939_390690
The COVID-19 crisis has led to substantial reductions in earnings. We propose a new measure of financial vulnerability, computable through survey data, to determine whether households can withstand a certain income shock for a defined period of time. Using data from the ECB Household Finance and Consumption Survey (HFCS) we analyse pre-existing financial vulnerability in seven EU countries. We find that income support is essential for many families: 47.2 million individuals, out of the 243 million considered, cannot afford three months of food and housing expenses without privately earned income. Differences across countries are stark, and those born outside of the EU are especially vulnerable. Through a tax-benefit microsimulation exercise, we then derive household net income when employees are laid-off and awarded the COVID-19 employment protection benefits enacted in the different countries. Our findings suggest that the COVID-19 employment protection schemes awarded are extremely effective in reducing the number of vulnerable individuals. The relative importance of rent and mortgage suspensions in alleviating vulnerability is highly country dependent.
Seré, M and C Midões (2021), ‘Living With Reduced Income: an Analysis of Household Financial Vulnerability Under COVID-19‘, COVID Economics 63, CEPR Press, Paris & London. https://cepr.org/publications/covid-economics-issue-63#392514_392939_390691
I study the impact of corona populism â€“ politics aimed at denying or downplaying the danger posed by COVID-19 â€“ on the evolution of the pandemic using regional data from Austria. The right-wing FPÃ– made a corona populist turn at the end of the first wave of infections. Using regression analysis, I show that the vote share of the FPÃ– at the last national parliamentary elections is a strong predictor for the number of COVID-19 deaths per capita after the FPÃ– switched their policy stance, while there is no or even a negative correlation before the policy switch. These results are robust under simple as well as sophisticated specifications of the model controlling for demographic and socioeconomic conditions. Interestingly, I do not find a statistically significant correlation between the FPÃ– vote share and the reported number of infections. I hypothesize that this can be traced back to a self-selection bias in testing, which causes a higher dark figure in FPÃ– strongholds. To explore this hypothesis, I extend the classical SIRD model to incorporate conditional quarantine, and heterogeneous mixing of two groups of agents who react differently to the pandemic. Such a model can explain the nontrivial empirics: if mixing is sufficiently homophilic, an increase in the share of â€œcorona scepticsâ€ can cause an increase in the number of deaths without increasing the number of reported infections. I finally discuss the implications for both groups.
Mellacher, P (2021), ‘The Impact of Corona Populism: Empirical Evidence from Austria and Theory‘, COVID Economics 63, CEPR Press, Paris & London. https://cepr.org/publications/covid-economics-issue-63#392514_392939_390692
Despite promising announcements on an effective vaccine, the control of the Covid-19 pandemic is critically dependent on the maximum compliance of citizens to a set of non-pharmaceutical interventions (NPI for short). We use statistical clustering to partition European citizens with regards to their perceptive risks and social attitudes during the first wave of the Covid-19 pandemic and find ten segments to predict, both the extent and mix of protective behaviors adopted. Those segments demonstrate a clear divide in the population, with on one extreme, a segment (representing 8% of the population) that is self-centered and exhibits low self-risk perception as well as low NPI compliance. The other extreme is a segment representing 11% of the population that is more socially oriented, and quite responsive to all protective measures. Since the data is survey-based, we adjusted responses based on information gap (by reaction time measurement) of both worry expression and NPI compliance, to confirm the robustness of our results. Further, we extend the notion of worries to be not only health-related but to include financial risk (like losing a job) as well as psychological worries (e.g., feeling alone, or being unable to meet with family and friends), as they prove to drive different NPI behaviors among the population.
Żyszkiewicz, M, D Reykowska, M Cincera, R Ohme and J Bughin (2021), ‘Perceptive risk clusters of European citizens and NPI compliance in face of the Covid-19 pandemics‘, COVID Economics 63, CEPR Press, Paris & London. https://cepr.org/publications/covid-economics-issue-63#392514_392939_390693
We analyze the impact of the COVID-19 pandemic on electricity consumption patterns in Spain. We highlight the importance of decomposing total electricity consumption into consumption by firms and by households to better understand the economic and social impacts of the crisis. While electricity demand by firms has fallen substantially, the demand by households has gone up. In particular, during the total lockdown, these effects reached -29% and +10% respectively, controlling for temperature and seasonality. While the electricity demand reductions during the second wave were milder, the demand by firms remained 5% below its normal levels. We also document a change in peopleâ€™s daily routines in response to the stringency of the lockdown measures, as reflected in their hourly electricity consumption patterns.
Ramos, R, A Lacuesta, N Fabra, S Garcıa-Uribe and O Bover (2021), ‘Firms and Households during the Pandemic: What do we learn from their electricity consumption?‘, COVID Economics 63, CEPR Press, Paris & London. https://cepr.org/publications/covid-economics-issue-63#392514_392939_390694
Small and medium-sized enterprises (SMEs) have been severely affected by the first wave of the COVID-19 crisis, which struck from January to July 2020. The COVID-19 crisis has had an impact on every industry, with unprecedently profound effects. It has also led to policy responses of a scale never seen before, which has curbed the number of failed SMEs. The expansion of the public credit guarantee system has contributed tremendously to SME financing. We investigated credit guarantee trends in relation to the first wave of the COVID-19 crisis and found that the spread of COVID-19 led to increased use of credit guarantees. The introduction of the new system that eliminated guarantee fees and interest costs, in particular, resulted in an explosive rise in credit guarantee use from May 2020 onwards. This enabled SMEs to borrow despite the significant decline of the macroeconomy. In terms of individual business types, there was a particularly marked rise in the usage of credit guarantees by companies in the restaurant industry, which has been catastrophically affected by the pandemic. The loans accompanied by credit guarantees are being used to make up for revenue deficits, not for profitable capital investment, so many companies will likely have difficulty paying off these loans in the future unless they successfully transform their business model for the post- COVID-19 era.
Yamori, N and T Aizawa (2021), ‘The Impact of the First Wave of the COVID-19 Crisis on Small and Medium-sized Enterprises and Credit Guarantee Responses: Early lessons from Japan‘, COVID Economics 63, CEPR Press, Paris & London. https://cepr.org/publications/covid-economics-issue-63#392514_392939_390695