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Labour Supply during Lockdown and a "New Normal": The Case of the Netherlands

Author

Listed:
  • Gaudecker, Hans-Martin von

    (University of Bonn)

  • Holler, Radost

    (Bonn Graduate School of Economics)

  • Janys, Lena

    (University of Konstanz)

  • Siflinger, Bettina M.

    (Tilburg University)

  • Zimpelmann, Christian

    (University of Hamburg)

Abstract

We document the evolution of hours of work using monthly data from February to June 2020. During this period, the Netherlands experienced a quick spread of the SARS-CoV-2 virus, enacted a lockdown for a period of six weeks and gradually opened thereafter. We show that during lock-down, substitutability between work from home and at the workplace or essential worker status are key to maintain a large fraction of pre-crisis hours of work. These pandemic-specific mechanisms become much less important as social distancing restrictions are eased in May and June. Labor supply recovers quickly in sectors affected heavily during lockdown, but goes down in other areas of the economy. The latter is unlikely caused by pandemic-induced supply changes; diminished demand is a more plausible explanation. Analyzing take-up of economic support programs, we find suggestive evidence that wage subsidies and other programs helped limit the early-stage impact of the crisis along the extensive margin.

Suggested Citation

  • Gaudecker, Hans-Martin von & Holler, Radost & Janys, Lena & Siflinger, Bettina M. & Zimpelmann, Christian, 2020. "Labour Supply during Lockdown and a "New Normal": The Case of the Netherlands," IZA Discussion Papers 13623, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13623
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    References listed on IDEAS

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    Cited by:

    1. Henri Bussink & Tobias Vervliet & Bas Weel, 2022. "The Short-Term Effect of the COVID-19 Crisis on Employment Probabilities of Labour-Market Entrants in the Netherlands," De Economist, Springer, vol. 170(2), pages 279-303, May.
    2. Tonatiuh Suárez-Meaney & Ioannis Chatziioannou & Héctor Daniel Reséndiz López & Luis Chias-Becerril & Efthimios Bakogiannis, 2023. "The Role of COVID-19 in Molding the Economy and Social Inequity of Mexican Households," Social Sciences, MDPI, vol. 12(10), pages 1-20, October.
    3. Bettina Siflinger & Michaela Paffenholz & Sebastian Seitz & Moritz Mendel & Hans-Martin von Gaudecker, 2021. "The COVID-19 Pandemic and Mental Health: Disentangling Crucial Channels," CRC TR 224 Discussion Paper Series crctr224_2021_271, University of Bonn and University of Mannheim, Germany.
    4. Balgová, Mária & Trenkle, Simon & Zimpelmann, Christian & Pestel, Nico, 2022. "Job search during a pandemic recession: Survey evidence from the Netherlands," Labour Economics, Elsevier, vol. 75(C).
    5. Melanie Khamis & Daniel Prinz & David Newhouse & Amparo Palacios-Lopez & Utz Pape & Michael Weber, 2021. "Early Labor Market Impacts of COVID-19 in Developing Countries," World Bank Publications - Reports 35047, The World Bank Group.
    6. Lauren Hoehn-Velasco & Adan Silverio-Murillo & Jose Roberto Balmori de la Miyar & Jacob Penglase, 2022. "The impact of the COVID-19 recession on Mexican households: evidence from employment and time use for men, women, and children," Review of Economics of the Household, Springer, vol. 20(3), pages 763-797, September.
    7. Hoehn-Velasco, Lauren & Silverio-Murillo, Adan & Balmori de la Miyar, Jose Roberto, 2021. "The long downturn: The impact of the great lockdown on formal employment," Journal of Economics and Business, Elsevier, vol. 115(C).
    8. Zimpelmann, Christian & Gaudecker, Hans-Martin von & Holler, Radost & Janys, Lena & Siflinger, Bettina, 2021. "Hours and income dynamics during the Covid-19 pandemic: The case of the Netherlands," Labour Economics, Elsevier, vol. 73(C).
    9. Palacios-Lopez,Amparo & Newhouse,David Locke & Pape,Utz Johann & Khamis,Melanie & Weber,Michael & Prinz,Daniel, 2021. "The Early Labor Market Impacts of COVID-19 in Developing Countries : Evidence from High-Frequency Phone Surveys," Policy Research Working Paper Series 9510, The World Bank.

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    Keywords

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    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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