Covid-19 Labor Market Monitoring

27 maj, 2020

A new report by Lena Hensvik and Oskar Nordström Skans contains an early assessment of the labor market impact of Covid 19 and the ensuing economic policy responses in Sweden. The report is written as part of an international Crisis Monitoring Program organized by the IZA.

Swedish measures to mitigate the spread of the Covid-19 virus have been less restrictive than those used in most other countries. Despite of this, we document a massive con- traction of the Swedish labor market with an emphasis on hotels, restaurants and retail sectors. Early policy responses have primarily been in the form of short-term financial aid to firms and policies aiming at preserving permanent employment contracts. A very generous short-time work scheme covers 9 percent of the total labor force. Policy measures are expensive, but sound fiscal finances makes them sustainable in the short to medium run.