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labour-market-wellbeing-during-covid-19-netherlands.md

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Labour Market Outcomes and Well-Being in the COVID-19 Pandemic — A View from the Netherlands
Hans-Martin von Gaudecker
Universität Bonn & IZA

Cases / Containment Measures

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Key messages

  • Labour market:
    • Small effects on extensive margin
    • Hours of work took deep dive, back up quickly
    • Early support programmes worked well, no rise in inequality
  • Gender division of tasks:
    • Women reduce hours more initially
    • Presence of children does not affect either parent's hours
    • Pre-Pandemic allocation of care tasks is reinforced
  • Mental well-being:
    • Strong reduction in mental health score in March
    • Back up to ≈normal levels by May
    • Very different for parents depending on who buffers shock

Based on three papers

  1. Gaudecker, H.-M. von, Holler, R., Janys, L., Siflinger, B. M., & Zimpelmann, C. (2020). Labour Supply during Lockdown and a "New Normal": The Case of the Netherlands. IZA DP 13623.
  2. Holler, R., Janys, L., Zimpelmann, C., Gaudecker, H.-M. von & Siflinger, B. M. (2021). The early impact of the CoViD-19 Pandemic on the Gender Division of Market and Household Work. Mimeo.
  3. Siflinger, B., Paffenholz, M., Seitz, S., Mendel, M., Gaudecker, H.-M. von (2021). The CoViD-19 Pandemic and Mental Health: Distentangling Crucial Channels. Mimeo.

Data: Background

  • LISS: Online Panel in the Netherlands, running since 2007
    • Similar efforts: ALP, UAS, CentERpanel
  • Based on probability sample
  • Roughly 5,000 households / 7,500 individuals
  • Each month, respondents get ≈30 minutes of questionnaires
  • ≈85% of respondents can be linked to administrative microdata (not today)

Data: CoViD-19 surveys, Time Use

LFP / Unemployment rates

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Hours of work

  • Closest short-term measure for labour market activity in presence of
    • firing restrictions
    • employment subsidies
  • Interpretation as labour demand / direct restrictions seems fine
    • e.g., see below that no add'l effect for parents
  • Measurement before CoViD-19 likely a bit too high

Hours worked / worked from home

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Persistence

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Non-Essential vs. Essential Work

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Support Programmes

  • NOW: Labour subsidies scheme
    • Loss in firm revenue ≥ 20% ⟶ Reimbursement of 30% of wage bill
    • Cannot fire workers
    • No other strings attached
  • TOZO: Income support measure for self-employed
  • TOGS: One-time payment for entrepeneurs in directly affected sectors

Affected by support programme

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Inequality

Hours worked / wfh by Gender

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Hours worked by kids at home

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Fixed effects regressions

  • Hours of work on gender × month, controls
  • Large heterogeneity
    • Non-essential FT women reduce 3 more hours during lockdown than non-essential men
    • Essential FT women reduce 1.5 hours less than non-essential men
  • Rich controls on RHS, exact set does not matter:
    • month × gender × (1, part time, essential worker, age)
    • month × (age, percentage of work doable from home, self-employment, profession, sector)
  • Add gender × month × school children at home
    • No change (precise zero or hours slightly better preserved among parents)
    • Coefficients very similar when restricting sample to 2-parent families

Childcare gap by mother's hours

Mental health

  • 5-item mental health inventory (MHI-5) — anxiety/depression
  • Questions referring to past 4 weeks, e.g. "I felt calm and peaceful"
  • 6 point scales, add up to indicator with scale
    • 100 "perfect" mental health
    • 0 worst possible outcome
  • Pre-clinical screening: Scores below 60 warrant further investigation
  • Focus on working age population

MHI-5, entire sample

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MHI-5, shared add'l caregiving

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MHI-5, respondent add'l caregiver

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MHI-5, partner add'l caregiver

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Takeaways

  • Shock to labour markets reasonably well buffered so far. Likely combination of
    • Firing restrictions
    • Generous STW scheme, support for small self-employed
    • Existing infrastructure for welfare payments
  • Work hours of women (relatively) well preserved
    • Consequence of highly subsidised daycare with comparably short hours?
    • Short school closures (≅2-3 months) very likely key
  • Gender division of tasks during CoViD-19: Very heterogeneous
    • Neither back to the 1950s, nor the great equalizer
    • Pre-existing patterns re-inforced
  • Mental health
    • Huge short-term drop initially in lockdown, quickly back
    • Drop largest in families where men took on initial burden
    • Large roles for infection risk, labour market risk, loneliness