European Labor Markets and the COVID-19 Pandemic: Fallout and the Path Ahead

Abstract

AcknowledgmentsThis departmental paper was led by Ravi Balakrishnan and Nir Klein, under the overall guidance of Jörg Decressin. It has benefited immensely from review and comments by many IMF staff colleagues in the European, Fiscal Affairs, Strategy Policy and Review, and Research Departments. We gained many insights from participants at numerous presentations of this work, including at the European Commission, the European Central Bank, and several national authorities in the context of Article IV Consultations. Estefania Cohn Bech, Chun Jin, and Christine Rubio provided invaluable help with data management and document production. Thanks are also due to Houda Berrada for leading the editorial process.The Departmental Paper Series presents research by IMF staff on issues of broad regional or crosscountry interest. The views expressed in this paper are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Labour Shortage and Labour Retention as a Possible Strategy in a Difficult Economic Situation Based on the Empirical Data of a Transitioning Economy

“…While the labour market of the developed nations recovered quickly from the COVID-19 pandemic, now we are facing labour shortages all around the world. This picture is mostly influenced by cyclical considerations, as workers are more prone to switch jobs in the hope of finding better employment during times of tight labour markets (Causa et al, 2022;Ando et al, 2022;Navickas et al, 2022). According to Astorquiza Bustos et al (2022), the most influencing structural changes were obvious for young people and in the artistic activities sector.…”

Inter‐ and intracountry effects of the Covid‐19 pandemic on wages and economic growth

“…Hypothesis 2-Impact of a decrease of the absolute advantage of the unskilled labor in production Several studies have examined the impact of the pandemic on various aspects of the labor market, including the productivity of unskilled workers. Ando et al (2022), Mongey et al (2021), and OECD (2020), among others, have reported that the productivity of unskilled workers was especially affected by the pandemic. Despite the potential for remote work, many unskilled workers were unable to make the transition, resulting in a significant decrease in their productivity.…”

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Is Singapore's Beveridge Curve Suffering from Long Covid Shifts?

“…Indeed since the onset of the pandemic, several countries have observed movements in their Beveridge curves. From Germany, Spain and UK (Ando et al, 2022) to Denmark (Darougheh, 2022) and Ireland (An Roinn Airgeadais, 2021), economists have reported outward shifts in their countries' Beveridge curves. In the US in particular, multiple researchers (Blanchard, Domash and Summers, 2022; Rodgers and Kassens 3 , 2022; Bok et al, 2022;Figura and Waller, 2022) have identified a significant rightward Beveridgean shift since the pandemic hit.…”