Questions and answers about coronavirus and the UK economy

Jobs, work, pay & benefits

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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Data: Tiers, jobs and infection rates

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

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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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Coronavirus, careers and mental health: what are the links?

Maintaining or restoring the mental health of the working age population during the Covid-19 crisis will not only have direct benefits for those affected. It will also have positive side effects for the performance of the UK’s labour market – and ultimately for national wealth.

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Data: Covid-19 redundancies – not really a record

Figure showing redundancies (thousands & % of workforce) Read more

How is Scotland’s economy faring in the pandemic?

With coronavirus entering a dangerous phase and winter approaching, the outlook for the Scottish economy has never been more uncertain. Many jobs remain furloughed, working hours have fallen sharply, and activity in the services sector is below where it was a decade ago.

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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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Data: Covid-19 cases and benefit claims

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How will the Welsh workforce be affected by the firebreak lockdown?

The new restrictions in Wales may be highly damaging for workers and businesses if proper government support packages are not in place. But if the short-term measures succeed in suppressing the virus, they could pave the road to a quicker recovery.

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Should selective government support replace the job furlough schemes?

As the UK’s job furlough scheme winds down, the government has shifted towards measures to support businesses and employees in local lockdowns. But even if Covid-19 eases, policy-makers will need to retain the capacity for selective sectoral assistance – and clarity on ‘state aid’.

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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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How prepared was the NHS for coronavirus?

Was the government doing enough to ‘protect the NHS’ in the years leading up to the pandemic? The UK needs a rigorous assessment of whether a national health service that is always operating at full capacity can cope with unexpected shocks like Covid-19.

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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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What will coronavirus mean for self-sufficiency in nurse numbers?

The Covid-19 pandemic has highlighted shortages in the number of workers needed for key roles in health and social care. With nursing being a major shortfall area, analysis of how effectively domestic training and international recruitment can plug the gap is crucial.

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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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What financial support is needed for artists and the arts in the pandemic?

Coronavirus has struck a particularly hard blow to the performing arts and those whose livelihoods depend on them. Having multiple sources of financial support available for the arts and artists increases the likelihood of meeting their many and varied needs.

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How do lockdowns affect economic activity in developing countries?

The severity of lockdown measures has been similar across the world. But differences between developing and advanced economies in their sectoral composition and the size of the informal economy mitigate the economic damage in poorer countries.

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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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The UK’s job furlough scheme is coming to an end: what happens next?

The UK government has announced that the Coronavirus Job Retention Scheme will come to an end in October 2020. What has been its impact? How have similar schemes in other countries fared? Should it continue and what will happen when it finally ends?

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What do we know about the impact of coronavirus on the creative industries?

Given the wide variation in how the products of the creative industries are made and consumed, the effects of Covid-19 are very different. And given the diversity of ways of working across the industries, so too are the measures needed to counteract the damage.

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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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What does coronavirus mean for the future of sport and fitness clubs?

With the closure of indoor sports facilities, many people have shifted to alternative forms of exercise. Even after re-opening, this is likely to affect gym owners and staff. Some previous gym users may also be getting less exercise, leading to concerns about rising obesity.

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How can we protect young people from being scarred by coronavirus?

Young people suffer negative consequences from recessions – and we expect their experience of the Covid-19 crisis to be no different. The government has a toolkit of policies to protect them from long-lasting ‘scarring’ effects: which measures are most likely to succeed?

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How has coronavirus affected pubs, cafes and restaurants?

The restaurant industry was effectively brought to a halt by lockdown. Since re-opening, there have been modest signs of recovery, but social distancing and widespread working from home continue to limit progress – and the sector is typically hit hard by recessions.

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Which parts of the UK have been hit hardest by the Covid-19 crisis?

The effects of coronavirus and lockdown on the economy have been very large: UK GDP fell by a record 20.4% in the second quarter (April to June 2020). New data indicate how this economic shock is playing out across the different parts of the country.

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What future for apprenticeships after coronavirus?

The Covid-19 pandemic and the ensuing economic uncertainty are causing interruptions to apprenticeship training. This is putting the future of apprenticeships at risk just at the time when they will be most needed to protect employment and sustain the recovery.

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Rebuilding after the Second World War: what lessons for today?

How did the UK reduce its very high ratio of public debt to GDP after the Second World War while simultaneously expanding the welfare state? Low interest rates, low unemployment, rapid economic growth and tolerance for higher taxation all played a role.

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What has coronavirus taught us about working from home?

The pandemic has now forced millions of people to work from home, typically those with higher incomes and in higher-income economies. Surveys suggest that, to date, employers have been positively surprised by the efficacy of this new way of working.

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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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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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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 the self-employed?

The self-employed are being hit particularly hard by the Covid-19 crisis. Many have been offered a lifeline through the government’s Self-Employment Income Support Scheme – but does it go far enough?

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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 exam disruptions affect young people’s futures?

Coronavirus has led to high-stakes summer examinations being cancelled and the grades replaced by teacher predictions, or administered in a new online format. It is vital to understand the potential impact on the lives of young people affected by these disruptions.

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How can labour market policy help to get people back into the right jobs?

As the economy restarts after the coronavirus crisis, workers that became unemployed eventually find new jobs. But initially these are often not the ‘right’ jobs – they are not good matches between employees’ skills and employers’ needs. What can policy do to improve workforce reallocation?

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What will be the impact of Covid-19 on public attitudes to immigration?

The coronavirus pandemic is changing the UK immigration debate, with tensions between requirements for stricter controls and greater recognition of key workers, many of whom are migrants. How will the crisis affect public attitudes to immigration?

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How does the government’s furlough scheme work?

The Coronavirus Job Retention Scheme was set up to encourage employers to keep their staff on during lockdown and make it easier for everyone to return to work when restrictions lift. How does the furlough scheme work and what will happen to jobs as it’s wound down?

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Who can work from home and how does it affect their productivity?

The effects of the Covid-19 pandemic on the economy will depend on many factors, one of which is who can work from home and what impact that has on their productivity. Ability to work from home varies by occupation, income, age, gender, ethnicity and location.

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Funded by

UKRI Economic and Social Research Council
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