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Age, industry, and unemployment risk during a pandemic lockdown.

ABSTRACT: This paper models the macroeconomic and distributional consequences of lockdown shocks during the COVID-19 pandemic. The model features heterogeneous life-cycle households, labor market search and matching frictions, and multiple industries of employment. We calibrate the model to data from New Zealand, where the health effects of the pandemic were especially mild. In this context, we model lockdowns as supply shocks, ignoring the demand shocks associated with health concerns about the virus. We then study the impact of a large-scale wage subsidy scheme implemented during the lockdown. The policy prevents job losses equivalent to 6.5% of steady state employment. Moreover, we find significant heterogeneity in its impact. The subsidy saves 17.2% of jobs for workers under the age of 30, but just 2.6% of jobs for those over 50. Nevertheless, our welfare analysis of fiscal alternatives shows that the young prefer increases in unemployment transfers as this enables greater consumption smoothing across employment states.

SUBMITTER: Graham J

PROVIDER: S-EPMC8450491 | biostudies-literature | 2021 Dec

REPOSITORIES: biostudies-literature

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Age, industry, and unemployment risk during a pandemic lockdown.

Graham James J Ozbilgin Murat M

Journal of economic dynamics & control 20210908

This paper models the macroeconomic and distributional consequences of lockdown shocks during the COVID-19 pandemic. The model features heterogeneous life-cycle households, labor market search and matching frictions, and multiple industries of employment. We calibrate the model to data from New Zealand, where the health effects of the pandemic were especially mild. In this context, we model lockdowns as supply shocks, ignoring the demand shocks associated with health concerns about the virus. We ...[more]

PMID: 34566210

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Project description:BACKGROUND:There is raised risk of mortality following unemployment, and reviews have consistently found worse psychological health among the unemployed. Inflammation is increasingly implicated as a mediating factor relating stress to physical disease and is strongly linked to depression. Inflammation may, therefore, be implicated in processes associated with excess mortality and morbidity during unemployment. This study examined associations of unemployment with inflammatory markers among working-age men and women from England and Scotland. METHODS:Cross-sectional analyses using data from the Health Survey for England and the Scottish Health Survey collected between 1998 and 2010. Systemic inflammation was indexed by serum concentrations of C reactive protein (CRP) and fibrinogen, and compared between participants currently employed/self-employed, currently unemployed and other groups. RESULTS:CRP, fibrinogen and odds of CRP >3 mg/L were all significantly raised for the unemployed, as compared to the employed participants (eg, OR for CRP >3 mg/L=1.43, CI 1.15 to 1.78 N=23 025), following adjustment for age, gender, occupational social class, housing tenure, smoking, alcohol consumption, body mass index, long-term illness and depressive/anxiety symptoms. Strengths of associations varied considerably by both age and country/region, with effects mainly driven by participants aged ≥48 and participants from Scotland, which had comparatively high unemployment during this time. CONCLUSIONS:Current unemployment is associated with elevated inflammatory markers using data from two large-scale, nationally representative UK studies. Effect modification by age suggests inflammation may be particularly involved in processes leading to ill-health among the older unemployed. Country/regional effects may suggest the relationship of unemployment with inflammation is strongly influenced by contextual factors, and/or reflect life course accumulation processes.

Dataset Information

Age, industry, and unemployment risk during a pandemic lockdown.

Publications

Age, industry, and unemployment risk during a pandemic lockdown.

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