Preserving Links in the Pandemic: Policies to Maintain Worker-Firm Attachment in the OECD

The COVID-19 pandemic caused an economic crisis, with governments restricting activity to reduce virus spread. Productive and profitable businesses were at risk of bankruptcy. Governments in advanced economies provided support to aid business continuity and preserve worker-firm links. This volume presents preliminary evidence on the efficacy and efficiency of these fiscal interventions in eight OECD member states.

Format: Hardback
Length: 274 pages
Publication date: 15 February 2023
Publisher: AEI Press

The economic crisis brought on by the COVID-19 pandemic was a unique occurrence that differed from a conventional recession. To minimize the potential for virus transmission, governments took deliberate steps to restrict economic activity in various sectors. Consequently, businesses that were previously productive and profitable found themselves on the brink of bankruptcy within a matter of weeks. Recognizing the gravity of the situation, governments in advanced economies implemented a range of support measures to ensure business continuity and maintain worker-firm relationships.

In this volume, we present preliminary evidence on the effectiveness and efficiency of these fiscal interventions. We approach the analysis through a comparative lens, examining the diverse decisions made by policymakers in eight Organisation for Economic Co-operation and Development (OECD) member states: Australia, Canada, France, Germany, Italy, Spain, the Netherlands, and the United Kingdom.

The COVID-19 pandemic posed unprecedented challenges to the global economy, leading to a significant decline in economic activity and a rise in unemployment. To address these challenges, governments implemented a range of fiscal policies, including direct stimulus measures, tax cuts, and loan programs. These policies aimed to support businesses and individuals and prevent a deeper economic downturn.

One of the key fiscal interventions was the implementation of lockdown measures, which were designed to limit in-person interactions and slow the spread of the virus. These measures resulted in a significant decline in economic activity, with many businesses forced to close their doors. To mitigate the impact of these closures, governments provided financial support to businesses, including grants, loans, and tax relief.

Another fiscal intervention was the provision of healthcare resources to combat the pandemic. Governments invested in the development and distribution of vaccines and medical equipment, as well as in the expansion of healthcare infrastructure. This investment helped to reduce the severity of the pandemic and protect public health.

In addition to these direct fiscal interventions, governments also implemented policies to support workers and businesses. These policies included unemployment benefits, wage subsidies, and training programs. These measures aimed to provide temporary relief to those who were affected by the pandemic and to support businesses in their efforts to adapt to the new economic environment.

The effectiveness and efficiency of these fiscal interventions have been the subject of much debate. Some argue that the measures were necessary to prevent a deeper economic downturn and that they helped to support businesses and individuals during a difficult time. Others argue that the measures were too costly and that they may have contributed to future economic problems.

To address these concerns, it is important to conduct further research to evaluate the impact of these fiscal interventions. This research should consider a range of factors, including the size and scope of the interventions, the targeting of the benefits, and the long-term economic consequences.

In conclusion, the economic crisis triggered by the COVID-19 pandemic was a unique occurrence that required a range of fiscal interventions to address. Governments in advanced economies implemented a range of support measures, including direct stimulus measures, tax cuts, and loan programs, to ensure business continuity and maintain worker-firm relationships. While the effectiveness and efficiency of these interventions have been the subject of debate, further research is necessary to evaluate their impact and determine the best approach for future economic downturns.

Dimension: 229 x 152 (mm)
ISBN-13: 9780844750484