## How Effective were Job-Retention Schemes during the COVID-19 Pandemic? A Microsimulation Approach for European Countries

_IMF Working Papers, January 13, 2023_

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## Bibliographic details
- Authors: W. Raphael Lam, Alexandra Solovyeva
- Published: January 13, 2023
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400229985.001

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### Authors and publication
- By W. Raphael Lam, Alexandra Solovyeva
- January 13, 2023
- IMF Working Paper No. 2023/003, Issue 003, Volume 2023
- Pages: 24
- DOI: https://doi.org/10.5089/9798400229985.001
- ISBN: 9798400229985
- ISSN: 1018-5941

### Research question and methodology
- Objective: Assess the effectiveness of job-retention schemes in stabilizing household income during the COVID-19 pandemic across European countries.
- Approach: Microsimulation using EUROMOD and household data.

### Key empirical findings
- Job-retention schemes, together with other measures, absorbed nearly 80 percent of market income shocks.
- This absorption almost doubled the extent of automatic stabilization provided by the pre-pandemic tax and benefit systems.
- Job-retention schemes, along with other fiscal support measures, helped mitigate the rise in the unemployment rate by about 3 percentage points.
- The schemes helped mitigate income inequality during the pandemic.
- Large observed effects are attributed to:
  - Widespread use and scaling up of job-retention schemes.
  - A deep but short-lived disruption to labor markets during the pandemic.
- Targeting: Job-retention schemes were largely targeted toward households more vulnerable to income losses, including lower-income families, youth, and low-skilled workers, enabling those households to stabilize their income.

### Subject areas and keywords
- Subject: COVID-19, Economic sectors, Financial crises, Health, Income, Income shocks, Labor, Labor markets, National accounts, Unemployment
- Keywords: COVID-19, COVID-19 pandemic, EU household, Europe, Global, Income, Income shocks, income stabilization, inequality, job-retention scheme, Job-retention schemes, Labor markets, Okun’s Law, short-time work, stabilization coefficient, stabilization in EU, Unemployment

*IMF Working Papers — How Effective were Job-Retention Schemes during the COVID-19 Pandemic? A Microsimulation Approach for European Countries*

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_Source: https://www.imf.org/en/publications/wp/issues/2023/01/13/how-effective-were-job-retention-schemes-during-the-covid-19-pandemic-a-microsimulation-528066_