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What can previous recessions tell us about the Covid-19 downturn?

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  • Brian Bell
  • Mihai Codreanu
  • Stephen Machin

Abstract

The labour market effects of the Covid-19 crisis measured as of June 2020 are compared with the three most recent UK recessions: the early 1980s, the early 1990s, and the downturn induced by the global financial crisis in the 2000s. We design a 'realistic' employment rate measure (based on individuals working a positive number of hours) that shows a decrease in employment between February and June of more than 15 percentage points, in sharp contrast with stable official unemployment. With hours worked only at 80 percent of the level from February 2020, the picture is bleak - the UK economy is on track to suffer its biggest unemployment shock since at least the 1980s recession. Despite their different impacts across industries, the Covid-19 crisis and the three most recent UK recessions share the common feature of a disproportionate impact on the most vulnerable (the poorest, the youngest, the least educated, and ethnic minorities).

Suggested Citation

  • Brian Bell & Mihai Codreanu & Stephen Machin, 2020. "What can previous recessions tell us about the Covid-19 downturn?," CEP Covid-19 Analyses cepcovid-19-007, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepcvd:cepcovid-19-007
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    References listed on IDEAS

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    2. van Ark, Bart & de Vries, Klaas & Erumban, Abdul, 2021. "How To Not Miss A Productivity Revival Once Again," National Institute Economic Review, National Institute of Economic and Social Research, vol. 255, pages 9-24, February.
    3. Brian Bell & Nicholas Bloom & Jack Blundell, 2021. "This time is not so different: income dynamics during the Covid-19 recession," POID Working Papers 012, Centre for Economic Performance, LSE.
    4. Eliason, Marcus, 2021. "The unequal(?) burden of unemployment in Sweden during the first wave of the COVID-19 pandemic," Working Paper Series 2021:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    5. Masagus M. Ridhwan & Jahen F. Rezki & Arief Ramayandi & Aryo Sasongko & Dinda T. Andariesta, 2022. "The Potential Scarring Effect Of Covid19 On Productivity And Labor Market: The Case Of Indonesia," Working Papers WP/09/2022, Bank Indonesia.
    6. Josh De Lyon & Swati Dhingra, 2021. "The impacts of Covid-19 and Brexit on the UK economy: early evidence in 2021," CEP Covid-19 Analyses cepcovid-19-021, Centre for Economic Performance, LSE.
    7. Eichhorst, Werner & Marx, Paul & Rinne, Ulf & Böheim, René & Leoni, Thomas & Tobin, Steven & Sweetman, Arthur & Cahuc, Pierre & Colussi, Tommaso & Jongen, Egbert L. W. & Verstraten, Paul & Ferreira, P, 2021. "IZA COVID-19 Crisis Response Monitoring: The Second Phase of the Crisis," IZA Research Reports 105, Institute of Labor Economics (IZA).
    8. Francesco Pastore, 2023. "Covid-19 and the youth-to-adult unemployment gap," IZA World of Labor, Institute of Labor Economics (IZA), pages 500-500, January.
    9. Ria Ivandic & Tom Kirchmaier & Ben Linton, 2020. "Changing patterns of domestic abuse during Covid-19 lockdown," CEP Discussion Papers dp1729, Centre for Economic Performance, LSE.
    10. Leonora Risse & Angela Jackson, 2021. "A gender lens on the workforce impacts of the COVID-19 pandemic in Australia," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 24(2), pages 111-144.
    11. Maria Mouratidou & Mirit K. Grabarski, 2022. "In the Eye of the Hurricane: Careers under Lockdown," Sustainability, MDPI, vol. 14(22), pages 1-15, November.

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