Covid-19 wage subsidy support and effects

David Maré and Dean Hyslop

No 21_02, Working Papers from Motu Economic and Public Policy Research

Abstract: This note provides a brief preliminary analysis of the short run impact of COVID-19 and the government’s Covid Wage Subsidy (CWS) response on labour market flows. We focus on two issues. First, to examine the selectivity of the CWS, we describe the characteristics of firms and of workers who did and did-not receive subsidy payments. Second, to gauge how the pandemic and the CWS affected the labour market, we describe two aspects of the adjustment process: the job-turnover rates for workers in subsidised and non-subsidised firms; and trends in the transition rates between non-employed in subsidised and non-subsidised employment. We find that there was a larger drop in job turnover rates in subsidised than non-subsidised firms, but the excess turnover in subsidised firms had return to pre-lockdown levels by September, while that in non-subsidised firms remained low.

Keywords: Covid; wage subsidy; worker flows (search for similar items in EconPapers)
JEL-codes: H24 J01 J63 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2021-02
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Persistent link: https://EconPapers.repec.org/RePEc:mtu:wpaper:21_02

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