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

41 Pages Posted: 31 Aug 2020

See all articles by Hans-Martin von Gaudecker

Hans-Martin von Gaudecker

University of Bonn - Economic Science Area; Netspar; Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)

Radost Holler

Bonn Graduate School of Economics

Lena Janys

University of Mannheim

Bettina Siflinger

University of Mannheim - Department of Economics

Christian Zimpelmann

IZA

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.

Keywords: hours of work, telecommuting, essential workers, labor hoarding, COVID-19

JEL Classification: J2, H3

Suggested Citation

von Gaudecker, Hans-Martin and Holler, Radost and Janys, Lena and Siflinger, Bettina and Zimpelmann, Christian, Labour Supply During Lockdown and a "New Normal": The Case of the Netherlands. IZA Discussion Paper No. 13623, Available at SSRN: https://ssrn.com/abstract=3682937

Hans-Martin Von Gaudecker (Contact Author)

University of Bonn - Economic Science Area ( email )

Adenauerallee 24-42
D-53113 Bonn
Germany

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA) ( email )

Amalienstrasse 33
Munich, 80799
Germany

Radost Holler

Bonn Graduate School of Economics

Lena Janys

University of Mannheim

Universitaetsbibliothek Mannheim
Zeitschriftenabteilung
Mannheim, 68131
Germany

Bettina Siflinger

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany

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