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Abstract:

External publication
IZA COVID-19 Crisis Response Monitoring: United Kingdom
Rui Costa and Stephen Machin
January 2021
Paper No' :
Full Paper (pdf)

Tags: covid-19; employment

On the 23rd of March, the United Kingdom locked down in response to the COVID-19 pandemic. Subsequently, the UK economy suffered the biggest contraction of economic activity in 41 years, experiencing a 21.5% year-on-year drop in GDP. The labour market has seen record rises in unemployment claims, big drops in employment and self-employment, a rise in short-time work along with an unprecedented fall in hours worked and a big drop in vacancies. These effects have been most pronounced among young workers and have shown little recovery in the recent months. Although the government's job retention scheme for employees and income support scheme for the self-employed helped maintaining unemployment rates stable until the middle of Summer, an increase is clearly visible in the recent months. How to ensure affected individuals are not on a trajectory heading towards longterm unemployment remains the top priority for economic recovery.