The impact of the Covid-19 job retention support on employment

Jaanika Meriküll and Alari Paulus

Economics Letters, 2023, vol. 222, issue C

Abstract: The paper studies the selection into the widespread job retention support that was provided during the Covid-19 pandemic and the employment effects of it, using firm-level administrative data for Estonia that cover the whole population of firms in 2019–2020. The endogeneity of the support is addressed by creating a control group from firms that were as severely hit as those that received the support and by using matching techniques. It is found that there was no selection of firms into the support by productivity once the sample is restricted to firms that experienced similar adverse conditions. The support had a positive effect on employment, as about one job in five that was supported by the scheme was saved and the unemployment rate would have been 2–4 percentage points higher in 2020 without the support.

Keywords: Covid-19; Job retention scheme; Employment (search for similar items in EconPapers)
JEL-codes: D04 D22 J68 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:222:y:2023:i:c:s0165176522004372

DOI: 10.1016/j.econlet.2022.110963

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