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Following the covid-induced lockdowns, many commented on the role the German model of Kurzarbeit could play in reducing unemployment. Other countries emulated the model. Looking at the experiences of Germany, the UK, Sweden and the USA, the article analyses the strengths and weaknesses of short-time working (STW) schemes. It asks whether STW has been well designed to have optimal short and longer run impact. It is quite effective as a short-term palliative, but in longer downturns, its weaknesses come to the fore. It is by no means clear that the UK needs a permanent replacement for the furlough. [ABSTRACT FROM AUTHOR]

Three years after the implementation of the Adjustment Programme for Greece, public debt remains at unsustainable levels. Despite recent improvements in meeting deficit targets and the fact that the risk of exit from the Euro Area has subsided, growth is still missing and unemployment has surpassed 25 per cent, causing major social tensions. The paper argues that a critical parameter of such failure was that the Programme grossly underestimated the adverse effects that fiscal correction might have on growth. Fiscal multipliers are found to be significant in the Euro Area so that fiscal cuts had strong and permanent Keynesian effects, rather than a transitive and minor downturn as initially assumed. In light of this, the paper argues that policies should now concentrate on enhancing growth and by relaxing fiscal targets allow the multipliers to raise activity as the only route to safeguard the exit from recession and ensure sustainability of debt. [ABSTRACT FROM PUBLISHER]

This paper reviews three UK-based welfare-to-work programmes featuring time-limited financial incentives to leave out-of-work benefits for employment. The policies considered are (i) the Employment Retention and Advancement demonstration, aimed at lone parents and the long-term unemployed; (ii) In-Work Credit, aimed at lone parents on welfare; (iii) Pathways to Work, aimed at recipients of incapacity benefits. I illustrate the difficulties in extrapolating from specific findings to general policy-relevant conclusions. Finally, I depict the challenge facing evaluators in future and point to the directions in which evaluation will need to develop if it is to contribute more fully to policy-relevant evaluation. [ABSTRACT FROM AUTHOR]

One of the main puzzles associated with the Great Recession has been the muted increase in recorded unemployment in the UK. In this paper we explore possible explanations for the behaviour of the UK labour market during the period of the recession. We establish that there has been significant underemployment, which partly explains the sluggish increase in unemployment, but also means that (i) significant numbers of workers are supplying fewer hours of work than they would like and (ii) when recovery comes, profit maximising employers are likely to increase the hours of existing workers, rather than making new hires. This particularly disadvantages the young. Our new analysis points to significant levels of underemployment among younger age groups — whether this is measured in relation to their actual hours of work, their desired hours of work, or their labour force participation. [ABSTRACT FROM PUBLISHER]

This paper considers some of the implications of the increase in UK unemployment since the beginning of the Great Recession. The major finding is that the sharp increase in unemployment and decrease in employment is largely concentrated on the young. This has occurred at a time when the size of the youth cohort is large. As a response to a lack of jobs there has been a substantial increase in applications to university, although there has only been a small rise in the number of places available. Further we find evidence that the unemployed have particularly low levels of well-being, are depressed, have low levels of life satisfaction, have difficulties paying their bills and are especially likely to be in financial difficulties. [ABSTRACT FROM PUBLISHER]

The Covid-19 pandemic has put forecasting under the spotlight, pitting epidemiological models against extrapolative time-series devices. We have been producing real-time short-term forecasts of confirmed cases and deaths using robust statistical models since 20 March 2020. The forecasts are adaptive to abrupt structural change, a major feature of the pandemic data due to data measurement errors, definitional and testing changes, policy interventions, technological advances and rapidly changing trends. The pandemic has also led to abrupt structural change in macroeconomic outcomes. Using the same methods, we forecast aggregate UK unemployment over the pandemic. The forecasts rapidly adapt to the employment policies implemented when the UK entered the first lockdown. The difference between our statistical and theory based forecasts provides a measure of the effect of furlough policies on stabilising unemployment, establishing useful scenarios had furlough policies not been implemented. [ABSTRACT FROM AUTHOR]

We use microsimulation combined with a model of the COVID-19 impacts on individuals and households to obtain projections of households in destitution in the United Kingdom. The projections are estimated at two levels: aggregate quarterly for the UK, for all quarters of 2020; and annual for 2020 differentiated by region, sector and household demographics. At the aggregate level, destitution is projected to be about three times higher than the non-COVID counterfactual level in 2020Q2, as well as substantially higher than the non-COVID case for the remainder of the year. This increased destitution is initially largely due to the effect on the self-employed, and as the Furlough scheme is drawn down, also on the unemployed. Impacts upon different regions and sectors vary widely, and so do variations across different household types. The sectors particularly affected are construction and manufacturing, while London and its closely connected regions (South East and the Midlands) are most severely affected. Single adult households suffer the most, and the adverse effects increase with number of children in the household. That the effects upon youth remain high is a particularly worrying sign, and very high increases in destitution are also projected for 25–54 year olds and the elderly (75 years and older). Further, severe adverse effects are projected for sections of society and the economy where multiple impacts are coincident. Robust and sustained mitigation measures are therefore required. [ABSTRACT FROM AUTHOR]

We examine labour market performance in the US and the UK prior to the onset of the Covid-19 crash. We then track the changes that have occurred in the months and days from the beginning of March 2020 using what we call the Economics of Walking About (EWA) that shows a collapse twenty times faster and much deeper than the Great Recession. We examine unemployment insurance claims by state by day in the US as well as weekly national data. We track the distributional impact of the shock and show that already it is hitting the most vulnerable groups who are least able to work from home the hardest – the young, the least educated and minorities. We have no official labour market data for the UK past January but see evidence that job placements have fallen sharply. We report findings from an online poll fielded from 11–16 April 2020 showing that a third of workers in Canada and the US report that they have lost at least half of their income due to the Covid-19 crisis, compared with a quarter in the UK and 45 per cent in China. We estimate that the unemployment rate in the US is around 20 per cent in April. It is hard to know what it is in the UK given the paucity of data, but it has gone up a lot. [ABSTRACT FROM AUTHOR]

In this note, we argue that a considerable part of the explanation for the benign wage growth in the advanced world is the rise in underemployment. In the years after 2008 the unemployment rate understates labour market slack. Underemployment is more important than unemployment in explaining the weakness of wage growth in the UK. The Phillips curve in the UK has now to be rewritten into wage underemployment space. Underemployment now enters wage equations while the unemployment rate does not. There is every reason to believe that the NAIRU has fallen sharply since the Great Recession. In our view the NAIRU in the UK may well be nearer to 3 per cent, and even below it, than around 5 per cent, which other commentators including the MPC and the OBR believe. [ABSTRACT FROM AUTHOR]

In this note, we focus on underemployment as a potential cause of lower wage growth, which itself may have deeper causes, but which has, we would argue, demonstrably changed since the 2008 recession. The gap between our measures of the number of additional hours required by those who want more hours and the number who want less has narrowed recently. Neither have returned to their pre-recession levels. In our view, underemployment remains a major factor in explaining the 2 per cent wage norm that continues to exist in the UK. [ABSTRACT FROM AUTHOR]

The article comments on the impact of the labor market slack on the economy of Great Britain. Topics discussed include the view that the Bank of England's Monetary Policy Committee (MPC) is randomly reducing its estimate of the impact of long-term unemployment and underemployment, the view that the labor market in the country is far from full employment as compared to the calculation of MPC, and effects on wages.

The article presents an economic forecast for Great Britain in 2009. It states that in the fourth quarter of 2009, an increase in gross domestic product (GDP) growth can still be expected due to a boost in consumption. Meanwhile, the author notes that while equity prices in the country are said to have rebounded during the first six months of 2009, unemployment in the country is also projected to peak in the first quarter of 2011.

Discusses the economic conditions in Great Britain as of July 2002. Inflation and unemployment in a growing economy; Use of metamorphic Phillips curve; Rates of increase in real wages; Role of the inflation target; Influence of real wage restraint on labor market behavior.

The article provides an overview of Great Britain's labour market whose overall employment growth has been healthy. Topics discussed include the sustained structural improvements in the functioning of its labour market and the sensible macroeconomic response to the financial crisis and reasons why wages have not increased despite the drop in the unemployment rate including the gap between the fall in the unemployment rate and rise in wages and low interest rates and impact of globalisation.

The production of this forecast is supported by the Institute's Corporate Members: Bank of England, HM Treasury, Mizuho Research Institute Ltd, Santander (UK) plc and by the members of the NiGEM users group. [ABSTRACT FROM PUBLISHER]

UK workers have been experiencing unprecedented falls in real wages and living standards. Taking a balanced view of the available data suggests that since 2008 real weekly wages have fallen by around 8 per cent, which amounts to a fall in annual earnings of about £2000 for the typical (median) worker. Three factors are important drivers of these unprecedented real wage falls. First, unemployment has been exerting a larger downward pressure on wages than in previous recessions. Second, low wages and low business investment have created the conditions for an extremely poor productivity record through both the recession and recovery, though this has been good news for jobs. Third, and pre-dating the recession, due to rising inequality the wages of typical British workers are no longer keeping up with productivity gains made in the economy. If sustained increases in real wages are to occur, this requires a return to strong productivity growth and a re-coupling of median wages to productivity. [ABSTRACT FROM PUBLISHER]

This article uses a dataset covering ten advanced economies (Australia, Belgium, Canada, France, Germany, Netherlands, Norway, Sweden, United Kingdom and the United States) to explore the role of real wages as an influence on employment and unemployment in the Great Depression and more generally in the 1920s and 1930s. The distinction between employment and unemployment movements during the Great Depression helps to clarify the role of supply side influences on the national heterogeneity of unemployment increases during the Great Depression. We find little general econometric evidence for the idea that movements in product wages had strong influences on employment either during the period of rising unemployment associated with the depression of the 1930s or more generally with the data which exist for the 1920s and 1930s. [ABSTRACT FROM PUBLISHER]

The article discusses alternative ways to reduce the deficit in Great Britain as of October 2010 that would aid growth and lessen unemployment. Although the British government is seen to benefit from borrowing rather than cutting spending and raising taxes, this reduces the resources available to future generations. The author stresses the provision of allowance for future crises which would increase deficit and debt stock more. The suggestion that retirement age is increased instead of implementing the government's consolidation plans is presented.

The increase in unemployment in the United Kingdom that accompanied the Great Recession has been conspicuous by its moderation. The rise in joblessness is dwarfed by the recent experience of the United States, by past recessionary episodes in the UK and by the contraction in GDP in the UK. Increased rates of job loss have played a dominant role in shaping the rise in British unemployment. Unemployment duration has not increased to the levels seen in previous recessions, in contrast to the US where duration substantially exceeds previous peaks. Looking forward, the UK labour market appears to have adjusted fully to the shocks that prompted the recession. Signs of reductions in match efficiency witnessed recently in the US are not mirrored in the UK. In contrast, while long-term unemployment currently remains well below historical levels, recent estimates of job finding rates suggest that it has the potential to rise much further. Thus, a timely recovery in aggregate demand will play an important role in averting persistently high unemployment in the future. [ABSTRACT FROM PUBLISHER]