Questions and answers about coronavirus and the UK economy

Inequality & poverty

News: All jump and no crawl: the Covid-19 time-warp

Before the pandemic, charts featuring sharp spikes and cliffs were always based on financial market data. Covid-19 means that previously slow things now move fast, with rapid shifts in the labour market and rising inequality across sectors and regions. 

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How is the coronavirus crisis shaping self-employment?

The self-employed have been hit particularly hard by the recession. Government support has been generous for many, but others have fallen through the cracks. Looking ahead, there are signs that self-employment is starting to undergo significant changes.

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How feasible is working from home in developing countries?

People’s economic experience of Covid-19 depends partly on whether it is possible for them to work from home. Fewer jobs can be done at home in poorer countries, which means that workers are at risk of either losing their jobs or becoming exposed to the virus while at work.

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What do economics students see as today’s biggest challenges?

Word cloud from 2020 undergraduates Read more

Will support for low-income families during school holidays improve children’s lives?

Providing supermarket vouchers to families on means-tested benefits to help feed their children during school holidays should increase spending on food, and reduce hunger and usage of food banks. It may also lead to a fall in obesity and an improvement in children’s performance at school.

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How should the academic achievements of school students be assessed this year?

Arrangements for GCSE and A-level exams in 2021 will again be challenging – but the alternatives look worse. Flexible exams may create resilience to further disruption. Universities should boost efforts to consider the full context of applicants’ educational experience.

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Data: Young people bear the brunt of Covid-19 job losses

Figure showing employment by age Read more

How has wage growth varied across the UK economy during the pandemic?

Covid-19 has had uneven effects on people’s health, finances and jobs. There is wide variation in the impact on earnings across the economy, particularly between the public and private sectors. Sectors with high shares of furloughed workers have experienced low wage growth.

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How can local policies limit the scarring of young people by coronavirus?

The Covid-19 crisis has led to rising youth unemployment and the threat of longer-term ‘scarring’ effects. Policies at the local level can make a difference to young people’s lives by sharing information about support programmes, encouraging take-up and coordinating local networks.

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How best should school resources be deployed in response to the Covid-19 crisis?

The Covid-19 crisis is likely to add to existing educational inequalities and create new ones. Cuts to spending per pupil will make it harder for schools in England to address these major challenges, particularly in more disadvantaged areas.

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How have migrant pupils been affected by lockdown and school closures?

For many newly arrived migrant pupils, lockdown and school closures have had an influence not only on their educational achievements but also on the process of integration. These effects are likely to continue into the new school year.

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What are the effects of Covid-19 on poverty and inequality?

The technique of ‘nowcasting’ provides insights into how the UK’s distribution of income is changing as a consequence of the pandemic. The key determinant of living standards and the impact on the poorest is what happens in the labour market.

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What kind of economy do people want if we ‘build back better’ after Covid-19?

Many people are debating whether the pandemic offers an opportunity to return to something better than ‘normal’ – in particular, moving away from using GDP growth as the sole indicator of progress. Developing greater economic and social resilience should be central to ‘building back better’.

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Would a universal basic income reduce poverty in the aftermath of Covid-19?

Governments have spent large sums of money to protect the most vulnerable in society, but might a universal basic income have been a better response? Such a policy could bring many benefits – but it would be an expensive way to reduce poverty and support the most needy.

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How might coronavirus affect older workers?

Recent years have seen considerable efforts to encourage older people to stay in the labour market for longer. With the health risks from Covid-19 rising with age, the pandemic and the economic downturn may affect both their ability and desire to do so.

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How will coronavirus affect the lifetime earnings of new graduates?

Graduating into an economic downturn can have negative consequences for young people in terms of pay and career progression throughout their lives. In response to the Covid-19 recession, many from wealthier backgrounds may opt to stay in education longer, further exacerbating inequality.

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How has lockdown affected children with special educational needs?

Children with special educational needs and disabilities have been particularly vulnerable to the sweeping changes that have accompanied the Covid-19 pandemic, in particular the closure of schools and cutbacks on additional support services during lockdown.

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What does Covid-19 mean for tackling differences in regional productivity?

While sustained improvements in productivity are key to economic progress, we cannot ignore inequalities in the distribution of prosperity, one dimension of which is inequality across places. It is vital to understand what explains differences in regional productivity.

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Why has social care been so badly hit by Covid-19?

The social care system in England was ill-prepared for coronavirus. Examples of the many weaknesses that have made it harder to protect users include difficulties in acquiring protective equipment and the discharge of hospital patients with Covid-19 into care homes.

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What will be the effect of coronavirus on gig economy workers?

If demand for ‘gig economy’ work increases as companies try to save costs in the Covid-19 recession, that could allow more people to work flexibly. Alternatively, if more people enter the gig economy, perhaps because they can’t find other jobs, competition for limited ‘gigs’ could increase.

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Is mental health among ethnic minorities worse affected by the pandemic?

Covid-19 is disproportionately affecting the physical and mental health of black, Asian and minority ethnic people in the UK, exacerbating existing inequalities. Bangladeshi, Indian and Pakistani men have suffered the highest increase in mental distress.

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How will coronavirus and the recession affect UK immigration?

Recessions have an impact on net migration flows, the labour market outcomes of migrants and the effects of migrants on native outcomes. Migrant workers face particular challenges in the Covid-19 crisis given the industries and occupations in which many of them are employed.

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How can we tackle widening gaps in literacy skills following coronavirus?

School closures in response to Covid-19 are expected to widen gaps in educational attainment, including literacy, for disadvantaged children. One way to mitigate this risk is through high quality reading programmes. How do schools know which interventions will be most effective?

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How should the government support households with unpayable debts?

In the now seemingly likely event of a slow recovery from the Covid-19 recession and high levels of unemployment, the government will need schemes to manage insolvency for households at risk of being unable to pay their debts. What types of support will be most effective?

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How will the pandemic and lockdown affect social mobility?

School closures are particularly damaging for children from already disadvantaged backgrounds; and the recession is likely to hurt young people starting out in the labour market. Widening educational and economic inequalities may increase the divide in life chances between rich and poor.

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How is coronavirus affecting the provision of free school meals?

The pandemic has required school closures across many countries, disrupting the provision of meals for pupils. What are the risks for children – and their families – who lose access to these programmes? And what could policy-makers do to mitigate the risks?

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What has Covid-19 revealed about the adequacy of UK digital infrastructure?

Lockdown led to an initial surge in internet traffic as many people switched to working from home – a shift that looks likely to persist. Can we rely on our digital infrastructure? And how big are the inequalities in access?

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Why has coronavirus affected cities more than rural areas?

Why have big cities around the world become coronavirus hotspots, while many smaller towns and rural regions have suffered fewer cases and deaths? And what are the roles of urban density and social interaction when global pandemics become more common?

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Why are people in some socio-economic groups more vulnerable to coronavirus?

Covid-19 infections and mortality have been more prevalent among disadvantaged groups of people in the UK and elsewhere. Differences in vulnerability seem to result from a combination of socio-economic differences in exposure to the disease, health behaviours and health conditions.

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How will the economic effects of coronavirus vary across areas of the UK?

There are significant differences in economic performance and wellbeing between and within areas of the UK. The health and economic crisis caused by Covid-19 is likely to exacerbate these existing inequalities.

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What difference will the COVID Summer Food Fund make to children’s lives?

Following a campaign by footballer Marcus Rashford, the government’s COVID Summer Food Fund will provide food vouchers for children from low-income families who are eligible for free school meals. What are the likely results?

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How will the response to coronavirus affect gender equality?

The Covid-19 crisis presents a potentially major setback for gender equality with its effects likely to persist long after lockdown has ended. Why have women borne such a heavy economic and caring burden – and will the negative impact persist?

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Why should the government provide income protection in a recession?

Unemployment insurance payments would be insufficient to offset the large income losses due to coronavirus and the ensuing recession. Governments are stepping in to provide much-needed income support to households that face significant declines in their monthly income.

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How can we make up the learning losses from lockdown?

The weeks of missed schooling for the younger generation due to coronavirus would lead to lower growth and greater inequality if left unaddressed. An extensive but time-limited programme of small group tutoring could help to repair some of the educational damage.

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What are the prospects for young people joining the labour market now?

Evidence from previous economic downturns suggests that young people leaving full-time education in the Covid-19 recession are going to find it much harder to secure employment and even harder to enter well-paid occupations than their immediate predecessors.

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How might the crisis affect children from poorer backgrounds?

Children who grow up in low-income households or whose parents have low levels of education lag behind their peers in progress on maths and reading at school. They also typically have worse behavioural skills. Will the lockdown and the recession make things even worse for them?

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How has coronavirus affected the division of domestic labour?

How has the division of family responsibilities for childcare, housework and home schooling been affected by lockdown? While the extra burden of ‘home production’ has fallen more on women, new ways of working may encourage a more equal allocation within households in future.

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What are the effects of coronavirus on the UK and US labour markets?

Millions of jobs have already been lost in the Covid-19 recession. What do we know about the kinds of workers who have been most affected? And what will be the likely effects on economic inequalities and the future prospects of people whose employment and earnings have been hit?

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How is coronavirus affecting inequalities across ethnic groups?

There are growing concerns that the UK’s ethnic minorities are suffering disproportionately as a result of the pandemic – in terms of both their higher mortality risks and the worse economic outcomes for some groups.

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How will the Covid-19 crisis affect the NHS?

The lockdown was implemented largely to ‘save lives and protect the NHS’ amid fears of capacity being overwhelmed. What are likely to be the effects of the crisis on the supply of NHS healthcare, and on demand for healthcare, now and in the future?

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How will lockdown and the recession affect children’s health?

The combination of a global health emergency and an economic downturn is unprecedented. But research evidence on the effects of previous crises and other challenging circumstances can shed light on the potential impact of lockdown and the recession on children’s health.

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What will be the impact of lockdown on children’s development?

Education plays a key role in cultivating the cognitive, behavioural and emotional skills that enable children to succeed in life. What are school closures during lockdown likely to mean for the accumulation of these skills among primary and early secondary school age children?

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What will be the impact of the crisis on household finances?

The finances of poorer and younger UK households are being hit harder by the Covid-19 recession. The policy response to provide immediate support for fragile household finances has been radical, but there are big questions about longer-term outcomes.

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Will government measures protect the most vulnerable in society?

The UK government’s strategy for supporting incomes in the crisis rests on the Coronavirus Job Retention Scheme, the Self-Employment Income Support Scheme and the social security system, mainly Universal Credit. What do we know about their effectiveness in protecting the vulnerable?

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What is the likely impact of remote learning on educational outcomes?

Even before the Covid-19 crisis, online learning was becoming increasingly prevalent in higher education. Now it is happening in schools during lockdown, what do we know about its impact on students’ performance? And is there a danger it will widen educational inequalities?

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How will lockdown and recession affect the lives of the very young?

It is widely understood that what happens in the early stages of life – from conception to the age of 5 – can have long-lasting effects. How might the experience of lockdown and the Covid-19 recession influence future outcomes for the very young?

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Funded by

UKRI Economic and Social Research Council
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